EXHIBIT 10.2
EXECUTION COPY
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CREDIT AGREEMENT
among
CHARTWELL LEISURE INC.
(formerly NATIONAL LODGING CORP.),
CHARTWELL CANADA CORP.,
VARIOUS BANKS,
THE BANK OF NOVA SCOTIA,
as SYNDICATION AGENT,
THE CHASE MANHATTAN BANK,
as ADMINISTRATIVE AGENT
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Dated as of August 28, 1996
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TABLE OF CONTENTS
SECTION 1. Amount and Terms of Credit................ 1
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1.01 The Commitments........................... 1
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1.02 Minimum Amount of Each Borrowing.......... 3
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1.03 Notice of Borrowing....................... 3
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1.04 Disbursement of Funds..................... 4
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1.05 Notes..................................... 4
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1.06 Conversions............................... 5
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1.07 Pro Rata Borrowings....................... 5
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1.08 Interest.................................. 5
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1.09 Interest Periods.......................... 6
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1.10 Increased Costs, Illegality, etc.......... 7
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1.11 Compensation.............................. 9
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1.12 Change of Lending Office.................. 9
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1.13 Replacement of Banks...................... 10
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1.14 Joint and Several Obligations............. 10
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SECTION 2. Letters of Credit......................... 10
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2.01 Letters of Credit......................... 11
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2.02 Minimum Stated Amount..................... 12
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2.03 Letter of Credit Requests................. 12
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2.04 Letter of Credit Participations........... 12
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2.05 Agreement to Repay Letter of Credit
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Drawings.................................. 13
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2.06 Increased Costs........................... 14
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SECTION 3. Fees: Reductions of Commitment............ 15
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3.01 Fees...................................... 15
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3.02 Voluntary Termination of Unutilized
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Commitments............................... 15
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3.03 Mandatory Reduction of Commitments........ 16
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SECTION 4. Prepayments; Payments; Taxes.............. 18
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4.01 Voluntary Prepayments..................... 18
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4.02 Mandatory Payments........................ 19
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4.03 Method and Place of Payment............... 20
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4.04 Net Payments; Taxes....................... 20
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SECTION 5. Conditions Precedent to Extensions of
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Credit on the Initial Borrowing Date...... 21
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5.01 Execution of Agreement, Notes............. 21
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5.02 Officer's Certificate..................... 21
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5.03 Fees, etc................................. 21
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5.04 Opinion of Counsel........................ 21
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5.05 Corporate Documents; Proceedings, etc..... 22
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5.06 Refinancing............................... 22
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5.07 Pledge Agreement.......................... 22
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5.08 Guaranties................................ 22
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5.09 Adverse Change............................ 22
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5.10 Litigation................................ 23
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5.11 Solvency Certificate and Insurance
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Certificates.............................. 23
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5.12 Pro Forma Financial Information;
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Projections............................... 23
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5.13 Approvals, etc............................ 23
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5.14 Cash on Hand.............................. 23
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5.15 Absence of Downgrade...................... 23
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5.16 HFS Subordination Agreement............... 24
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5.17 Additional Equity......................... 24
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5.18 Additional Financial Statements........... 24
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SECTION 6. Conditions Precedent to Extensions of..... 24
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Credit on the Canadian Borrowing Date.....
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6.01 Consummation of the Canadian Acquisition.. 24
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6.02 Officer's Certificate..................... 25
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6.03 Adverse Change............................ 25
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6.04 Litigation................................ 25
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6.05 Environmental Assessments................. 25
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6.06 Approvals, etc............................ 25
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6.07 Security Agreement........................ 25
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SECTION 7. Conditions Precedent to All Credit Events. 26
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7.01 No Default; Representations and Warranties 26
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7.02 Adverse Change, etc....................... 26
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7.03 Litigation................................ 26
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7.04 Notice of Borrowing; Letter of Credit..... 26
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Request...................................
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7.05 Certain Requirements With Respect to Loans
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Incurred to Effect Permitted Hotel
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Acquisitions.............................. 27
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SECTION 8. Representations and Warranties............ 27
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8.01 Corporate and Partnership Status.......... 27
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8.02 Corporate or Partnership Power and
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Authority................................. 27
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8.03 No Violation.............................. 27
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8.04 Governmental Approvals.................... 28
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8.05 Financial Statements; Financial........... 28
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Condition; Undisclosed Liabilities;
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Projections, etc.......................... 28
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8.06 Litigation................................ 29
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8.07 True and Complete Disclosure.............. 29
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8.08 Use of Proceeds; Margin Regulations....... 30
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8.09 Tax Returns and Payments.................. 30
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8.10 Compliance with ERISA..................... 30
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8.11 The Security Documents.................... 31
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8.12 Representations and Warranties in
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Documents................................. 31
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8.13 Properties................................ 31
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8.14 Capitalization............................ 32
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8.15 Subsidiaries, Joint Ventures,
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Unrestricted Subsidiaries................. 32
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8.16 Compliance with Statutes, etc............. 32
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8.17 Investment Company Act.................... 32
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8.18 Public Utility Holding Company Act........ 32
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8.19 Environmental Matters..................... 32
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8.20 Labor Relations........................... 33
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8.21 Patents, Licenses, Franchises and Formulas 33
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8.22 Indebtedness.............................. 33
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8.23 Canadian Acquisition; Recapitalization.... 33
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SECTION 9. Affirmative Covenants..................... 34
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9.01 Information Covenants..................... 34
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9.02 Books, Records and Inspections............ 36
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9.03 Maintenance of Property, Insurance........ 36
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9.04 Corporate Franchises...................... 37
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9.05 Compliance with Statutes, etc............. 37
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9.06 Compliance with Environmental Laws........ 37
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9.07 ERISA..................................... 37
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9.08 End of Fiscal Years; Fiscal Quarters...... 38
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ii
9.09 Performance of Obligations................ 38
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9.10 Payment of Taxes.......................... 38
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9.11 Hotel Franchisors......................... 38
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9.12 Joint Venture Distributions............... 38
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9.13 Corporate Separateness.................... 39
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9.14 Management Agreements..................... 39
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SECTION 10. Negative Covenants........................ 39
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10.01 Liens..................................... 39
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10.02 Consolidation, Merger, Purchase or Sale
of Assets, etc............................ 41
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10.03 Restricted Payments....................... 43
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10.04 Indebtedness.............................. 44
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10.05 Advances, Investments and Loans........... 47
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10.06 Transactions with Affiliates.............. 50
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10.07 Capital Expenditures...................... 51
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10.08 Minimum Consolidated Net Worth............ 52
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10.09 Consolidated Interest Coverage Ratio...... 52
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10.10 Consolidated Current Ratio................ 52
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10.11 Total Leverage Ratio...................... 52
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10.12 Limitation on Payments of Certain
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Indebtedness,Modifications of Certificate
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of Incorporation, By-Laws and Certain
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Indebtedness, Modifications of Certain
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Agreements, etc........................... 52
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10.13 Limitation on Certain Restrictions on
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Subsidiaries and Joint Ventures........... 53
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10.14 Limitation on Issuance of Capital Stock... 53
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10.15 Business.................................. 53
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10.16 Limitation on Creation of Subsidiaries;
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Unrestricted Subsidiaries and Joint
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Ventures.................................. 53
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SECTION 11. Events of Default......................... 54
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11.01 Payments.................................. 54
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11.02 Representations........................... 54
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11.03 Covenants................................. 54
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11.04 Default Under Other Agreements............ 54
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11.05 Bankruptcy, etc........................... 55
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11.06 ERISA..................................... 55
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11.07 Security Documents........................ 55
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11.08 Guaranty.................................. 56
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11.09 HFS Subordination Agreement............... 56
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11.10 Judgments................................. 56
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11.11 HFS Franchise Agreements, etc............. 56
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11.12 Total Unrestricted Subsidiary Leverage
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Ratio..................................... 56
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11.13 Unrestricted Subsidiary Tax Payments...... 56
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SECTION 12. Definitions and Accounting Terms.......... 57
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12.01 Defined Terms............................. 57
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SECTION 13. The Agents................................ 82
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13.01 Appointment............................... 82
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13.02 Nature of Duties.......................... 82
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13.03 Lack of Reliance on the Agents............ 82
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13.04 Certain Rights of the Agents.............. 82
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13.05 Reliance.................................. 82
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13.06 Indemnification........................... 83
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13.07 The Agents in their Individual Capacities. 83
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13.08 Holders................................... 83
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13.09 Resignation by the Agents................. 83
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SECTION 14. Miscellaneous............................. 84
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14.01 Payment of Expenses, etc.................. 84
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14.02 Right of Setoff........................... 84
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14.03 Notices................................... 85
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14.04 Benefit of Agreement...................... 85
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14.05 No Waiver; Remedies Cumulative............ 86
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14.06 Payments Pro Rata......................... 86
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14.07 Calculations; Computations................ 87
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14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
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VENUE; WAIVER OF JURY TRIAL............... 87
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14.09 Counterparts.............................. 88
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14.10 Effectiveness............................. 88
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14.11 Headings Descriptive...................... 88
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14.12 Amendment or Waiver; etc.................. 88
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14.13 Survival.................................. 89
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14.14 Domicile of Loans......................... 89
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14.15 Confidentiality........................... 89
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14.16 Register.................................. 90
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14.17 Limitation on Additional Amounts, etc..... 90
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14.18 Certain Provisions Regarding Joint
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Ventures.................................. 90
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14.19 Judgment; Currency........................ 91
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SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III [INTENTIONALLY OMITTED]
SCHEDULE IV Real Property
SCHEDULE V Subsidiaries and Joint Ventures
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Certain Joint Ventures
SCHEDULE XI Litigation
SCHEDULE XII Identified Capital Expenditures
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT B-3 Revolving Canadian Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Officer's Certificate
EXHIBIT F Pledge Agreement
EXHIBIT G-1 HFS Guaranty
EXHIBIT G-2 Subsidiaries Guaranty
EXHIBIT G-3 Company Guaranty
EXHIBIT H Officer's Solvency Certificate
EXHIBIT I HFS Subordination Agreement
EXHIBIT J HFS Subordinated Note
EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L-1 Form of Travelodge Franchise Agreement
EXHIBIT L-2 Form of Ramada Franchise Agreement
EXHIBIT M-1 Form of Opinion of Counsel to HFS
EXHIBIT M-2 Form of Opinion of Counsel to the Borrowers
EXHIBIT M-3 Form of Opinion of General Counsel to the Borrower
EXHIBIT N Form of Permitted Subordinated Indebtedness Subordination
Provisions
EXHIBIT O Form of Security Agreement
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CREDIT AGREEMENT, dated as of August 28, 1996, among CHARTWELL LEISURE
INC. (the "Company"), CHARTWELL CANADA CORP. (the "Canadian Borrower"), the
Banks party hereto from time to time, THE BANK OF NOVA SCOTIA, as Syndication
Agent, and THE CHASE MANHATTAN BANK, as Administrative Agent (all capitalized
terms used herein and defined in Section 12 are used herein as therein defined).
W I T N E S S E T H :
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WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Company and the Canadian
Borrower the respective credit facilities provided for herein:
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and
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conditions set forth herein, each Bank severally agrees to make a loan or loans
(each a "Revolving $ Loan" and, collectively, the "Revolving $ Loans") to the
Company in an aggregate amount up to but not exceeding such Bank's Revolving
Loan Commitment, which Revolving $ Loans:
(i) shall be made at any time and from time to time on and after
the Initial Borrowing Date and prior to the Final Maturity Date;
(ii) shall, at the option of the Company, be $ Base Rate Loans or
$ Eurodollar Loans, provided that, except as otherwise specifically
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provided in Section 1.10(b), all Revolving $ Loans comprising the same
Borrowing shall at all times be of the same Type;
(iii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iv) shall not exceed for any Bank at any time outstanding the
Revolving Loan Commitment of such Bank at such time less the product of (x)
such Bank's Adjusted Percentage and (y) the sum of (I) the aggregate amount
of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the borrowing of,
Loans) at such time, (II) the aggregate principal amount of all Swingline
Loans then outstanding and (III) the Dollar Equivalent Amount of Revolving
Loans at such time; and
(v) shall not exceed for all Banks at any time outstanding the
Total Revolving Loan Commitment at such time less the sum of (x) the
aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with the
borrowing of, Loans) at such time, (y) the aggregate principal amount of
all Swingline Loans then outstanding and (z) the Dollar Equivalent Amount
of Revolving Loans at such time.
(b) Subject to and upon the terms and conditions herein set forth
Chase in its individual capacity agrees, at any time and from time to time after
the Initial Borrowing Date and prior to the Swingline Expiry Date, to make a
loan or loans (each a "Swingline Loan" and, collectively, the "Swingline Loans")
to the Company in an aggregate principal amount up to but not exceeding the
Swingline Commitment which Swingline Loans (i) shall be made and maintained as $
Base Rate Loans, (ii) shall not exceed at any time outstanding the Swingline
Commitment, (iii) shall not exceed in aggregate principal amount at any time
outstanding the Total Revolving $ Loan Commitment then in effect less (x) the
Dollar Equivalent Amount of the aggregate principal amount of all Revolving
Loans then outstanding and (y) all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid at such time with the proceeds of, and
simultaneously with the occurrence of, the borrowing of Loans) at such time, and
(iv) may be repaid and reborrowed in accordance with the provisions hereof. On
the Swingline Expiry Date, all Swingline Loans shall be repaid in full. Chase
shall not make any Swingline Loan after receiving
a written notice from the Company or any Bank stating that a Default or an Event
of Default exists and is continuing until such time as Chase shall have received
written notice of (i) rescission of all such notices from the party or parties
originally delivering such notice (which notice of rescission such Person or
Persons shall deliver to Chase promptly upon the discontinuance of such Default
or Event of Default) or (ii) the waiver of such Default or Event of Default in
accordance with this Agreement. Also, Chase shall have no obligation to make any
Swingline Loan in the event a Bank Default exists unless Chase has entered into
arrangements satisfactory to it and the Company to eliminate Chase's risk with
respect to any such Defaulting Bank's or Banks' obligations to fund Mandatory
Borrowings, including by collateralizing such Defaulting Bank's or Banks'
Adjusted Percentages of the Swingline Loans outstanding from time to time. On
any Business Day, Chase may, in its sole discretion, give notice to the Banks
that all then outstanding Swingline Loans shall be funded with a Borrowing of
Revolving $ Loans (provided that such notice shall be deemed to have been
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automatically given upon the occurrence of an Event of Default under Section
11.05), in which case a Borrowing of Revolving $ Loans constituting $ Base Rate
Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day by all Banks pro rata based on each such
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Banks's Adjusted Percentage and the proceeds thereof shall be applied directly
to Chase to repay such outstanding Swingline Loans. Each Bank hereby irrevocably
agrees to make such Revolving $ Loans upon one Business Day's notice pursuant to
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified to it in writing by Chase
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the minimum amount for a Borrowing specified in Section 1.02, (ii) whether
any conditions specified in Section 5, 6 or 7 are then satisfied, (iii) the date
of such Mandatory Borrowing and (iv) any reduction in the Total Revolving Loan
Commitment after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Company), each Bank
hereby agrees that it shall forthwith purchase from Chase (without recourse or
warranty), by assignment, such outstanding Swingline Loans as shall be necessary
to cause such Banks to share in such Swingline Loans ratably based upon their
respective Adjusted Percentages, provided that, all interest payable on such
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Swingline Loans shall be for the account of Chase until the date the respective
purchase is made and, to the extent attributable to such purchase, shall be
payable to such Bank purchasing same from and after such date of purchase.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank severally agrees to make a loan or loans (each a "Revolving C$ Loan"
and, collectively, the "Revolving C$ Loans") to the Canadian Borrower in an
aggregate amount up to but not exceeding such Bank's Revolving C$ Loan
Commitment, which Revolving C$ Loans:
(i) shall be made at any time and from time to time on and
after the Canadian Borrowing Date and prior to the Final Maturity Date;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed for any Bank at any time outstanding
the Revolving C$ Loan Commitment of such Bank at such time;
(iv) shall not exceed for all Banks at any time outstanding the
Total C$ Revolving Loan Commitment at such time;
(v) shall have a Dollar Equivalent Amount which shall not
exceed for any Bank at any time outstanding the Revolving Loan Commitment
of such Bank at such time less the product of (x) such Bank's Adjusted
Percentage and (y) the sum of (I) the aggregate amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the borrowing of, Loans) at such time,
(II) the aggregate principal amount of all Swingline Loans then outstanding
and (III) the Revolving $ Loans at such time; and
(vi) shall have a Dollar Equivalent Amount which shall not
exceed for all Banks at any time outstanding the Total Revolving Loan
Commitment at such time less the sum of (x) the aggregate amount of the
Letter of Credit Outstandings at such time (exclusive of Unpaid Drawings
which are repaid with
2
the proceeds of, and simultaneously with the borrowing of, Loans), (y) the
aggregate principal amount of all Swingline Loans then outstanding and (z)
the Revolving $ Loans at such time.
The Canadian Borrower may not borrow Revolving C$ Loans more than once in any
period of 30 consecutive days. The Revolving C$ Loans shall bear interest at
the rate set forth in Section 1.08(c) (subject to the provisions of Section
1.08(d)).
(d) Notwithstanding anything to the contrary contained herein, prior
to the Canadian Borrowing Date (i) the Total Outstandings shall not exceed
$85,000,000 and (ii) the Canadian Borrower may not borrow or have Letters of
Credit issued for its account under this Agreement.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
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of each Borrowing of Revolving $ Loans shall not be less than $1,000,000 (except
that Mandatory Borrowings shall be made in the amounts required by Section
1.01(b)), and the aggregate principal amount of each Borrowing of Swingline
Loans shall not be less than $50,000. The aggregate principal amount of each
Borrowing of Revolving C$ Loans shall not be less than C$1,000,000. More than
one Borrowing may occur on the same date, but at no time shall there be
outstanding more than six Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever a Borrower desires to borrow
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Revolving Loans hereunder, it shall give the Administrative Agent at its Notice
Office at least one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of each $ Base Rate Loan, at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each $ Eurodollar Loan to be made hereunder and at least four Business Days'
prior written notice (or telephone notice promptly confirmed in writing) of each
Revolving C$ Loan to be made hereunder, provided that any such notice shall be
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deemed to have been given on a certain day only if given before 11:00 A.M. (New
York time) on such day. Each such written notice or written confirmation of
telephonic notice (each a "Notice of Borrowing"), except as otherwise expressly
provided in Section 1.10, shall be irrevocable and shall be given by the
respective Borrower in the form of Exhibit A, appropriately completed to specify
(i) the name of such Borrower, (ii) the aggregate principal amount of the Loans
to be made pursuant to such Borrowing, (iii) the date of such Borrowing (which
shall be a Business Day), (iv) whether the Loans being made pursuant to such
Borrowing are Revolving $ Loans or Revolving C$ Loans, (v) whether the Loans
being made are to be initially maintained as $ Base Rate Loans, $ Eurodollar
Loans or C$ Eurodollar Loans and (vi) in the case of Eurodollar Loans, the
Interest Period to be applicable thereto. The Administrative Agent shall
promptly give each Bank notice of such proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters required by the immediately
preceding sentence to be specified in the Notice of Borrowing.
(b) Whenever the Company desires to borrow Swingline Loans hereunder,
it shall give the Administrative Agent no later than 12:00 Noon (New York time)
on the day such Swingline Loan is to be made, written notice (or telephonic
notice promptly confirmed in writing) of such Borrowing. Each such notice shall
be irrevocable and specify in each case (i) the date of Borrowing (which shall
be a Business Day) and (ii) the aggregate principal amount of the Swingline
Loans to be made pursuant to such Borrowing. The Administrative Agent shall
promptly give Chase written notice (or telephonic notice promptly confirmed in
writing) of each proposed Borrowing of Swingline Loans and of the other matters
covered by the Notice of Borrowing.
(c) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(b), with the Company irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(d) Without in any way limiting the obligation of either Borrower to
confirm in writing any telephonic notice of any Borrowing, the Administrative
Agent may act without liability upon the basis of telephonic notice of such
Borrowing believed by the Administrative Agent in good faith to be from an
Authorized Officer of such Borrower prior to receipt of written confirmation.
In each such case, the Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of such telephonic notice.
3
1.04 Disbursement of Funds. No later than 12:00 Noon (2:00 P.M. in
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the case of Swingline Loans) (New York time) on the date specified in each
Notice of Borrowing (or, in the case of Swingline Loans, the notice delivered
under Section 1.03(b)), each Bank will make available its pro rata portion of
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each Borrowing (or, in the case of Swingline Loans, Chase will make available
the entire amount of such Borrowing) requested to be made on such date. All
such amounts shall be made available in Dollars or Canadian Dollars, as the case
may be, and in immediately available funds at the Payment Office of the
Administrative Agent, and the Administrative Agent will make available to the
applicable Borrower at the Payment Office, in Dollars or Canadian Dollars, as
the case may be, and in immediately available funds, the aggregate of the
amounts so made available by the Banks. Unless the Administrative Agent shall
have been notified by any Bank prior to the date of Borrowing that such Bank
does not intend to make available to the Administrative Agent such Bank's
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Bank has made available such amount to the Administrative Agent
on such date of Borrowing and the Administrative Agent may, in reliance upon
such assumption, make available to the applicable Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the applicable
Borrower and such Borrower, to the extent such Borrower has been funded such
amount, shall within one day thereafter pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Bank or the applicable Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to such
Borrower until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank (a) at the overnight Federal Funds Rate, in the case of Revolving $ Loans,
and (b) at a rate determined by the Administrative Agent to represent its cost
of overnight or short-term funds in Canadian Dollars, in the case of Revolving
C$ Loans, and (ii) if recovered from a Borrower, the rate of interest applicable
to the respective Borrowing, as determined pursuant to Section 1.08. Nothing in
this Section 1.04 shall be deemed to relieve any Bank from its obligation to
make Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Company's obligation to pay the principal of, and
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interest on, the Revolving $ Loans made to it by each Bank shall be evidenced by
(i) if Revolving $ Loans, a promissory note duly executed and delivered by the
Company substantially in the form of Exhibit B-1, with blanks appropriately
completed in conformity herewith (each a "Revolving $ Note" and, collectively,
the "Revolving $ Notes") and (ii) if Swingline Loans, by a promissory note duly
executed and delivered by the Company substantially in the form of Exhibit B-2,
with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Canadian Borrower's obligation to pay the principal of, and
interest on, the Revolving C$ Loans made by each Bank shall be evidenced by a
promissory note duly executed and delivered by the Canadian Borrower
substantially in the form of Exhibit B-3, with blanks appropriately completed in
conformity herewith (each a "Revolving C$ Note" and, collectively, the
"Revolving C$ Notes").
(c) The Revolving $ Note issued to each Bank shall (i) be executed by
the Company, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the Revolving Loan Commitment of such Bank and be payable in the
principal amount of the Revolving $ Loans evidenced thereby, (iv) mature on the
Final Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the $ Base Rate Loans and $ Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary repayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(d) The Swingline Note issued to Chase shall (i) be executed by the
Company, (ii) be payable to the order of Chase and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Swingline
Commitment and be payable in the outstanding principal amount of the Swingline
Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v) bear
interest as provided in Section 1.08(a) in respect of the $ Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01,
4
and mandatory prepayment as provided in Section 4.02 and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(e) The Revolving C$ Note issued to each Bank shall (i) be executed
by the Canadian Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Revolving C$ Loan Commitment of such Bank and be
payable in the outstanding principal amount of the Loans evidenced thereby, (iv)
mature on the Final Maturity Date, (v) bear interest as provided in Section 1.08
in respect of Revolving C$ Loans evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01 and mandatory prepayment as provided in
Section 4.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect either Borrower's obligations in respect of such Loans.
1.06 Conversions. (a) The Company shall have the option to convert,
-----------
on any Business Day, at least $1,000,000 of the outstanding principal amount of
Revolving $ Loans made to the Company pursuant to one or more Borrowings of one
or more Types of Revolving $ Loans into a Borrowing or Borrowings of another
Type of Revolving Loan, provided that (i) except as otherwise provided in
--------
Section 1.10(b), $ Eurodollar Loans may be converted into $ Base Rate Loans only
on the last day of an Interest Period applicable to the Revolving $ Loans being
converted and no partial conversion of a Borrowing of $ Eurodollar Loans shall
reduce the outstanding principal amount of such $ Eurodollar Loans made pursuant
to a single Borrowing to less than $1,000,000; (ii) upon the occurrence and
during the continuance of any Event of Default, $ Base Rate Loans may not be
converted into $ Eurodollar Loans if the Administrative Agent (acting at the
instruction of the Required Banks) has notified the Company that such
conversions shall not be permitted during the continuance of an Event of
Default; and (iii) no conversion pursuant to this Section 1.06 shall result in a
greater number of Borrowings of Eurodollar Loans than is permitted under Section
1.02. Each such conversion shall be effected by the Company by giving the
Administrative Agent at its Notice Office prior to 11:00 A.M. (New York time) at
least three Business Days' prior written notice (each a "Notice of Conversion")
specifying the Revolving $ Loans to be so converted, the Borrowing(s) pursuant
to which such Revolving $ Loans were made and, if to be converted into $
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion. Upon any such conversion the proceeds thereof will be deemed to be
applied directly on the day of such conversion to prepay the outstanding
principal amount of the Revolving $ Loans being converted.
(b) Swingline Loans shall be made and maintained as $ Base Rate
Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under
-------------------
this Agreement shall be incurred from the Banks pro rata on the basis of their
--- ----
Revolving Loan Commitments. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Loans hereunder and
that each Bank shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Bank to make its Loans
hereunder.
1.08 Interest. (a) The Company agrees to pay interest in respect of
--------
the unpaid principal amount of each $ Base Rate Loan made to the Company from
the date the proceeds thereof are made available to the Company until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such $
Base Rate Loan and (ii) the conversion of such $ Base Rate Loan to a $
Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Base Rate in effect from time
to time.
(b) The Company agrees to pay interest in respect of the unpaid
principal amount of each $ Eurodollar Loan made to the Company from the date the
proceeds thereof are made available to the Company until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such $ Eurodollar Loan and
(ii) the conversion of such $ Eurodollar Loan to a $ Base Rate Loan pursuant to
Section 1.06, 1.09 or 1.10, as applicable,
5
at a rate per annum which shall, during each Interest Period applicable thereto,
be equal to the sum of the Applicable Margin plus the Eurodollar Rate for such
Interest Period.
(c) The Canadian Borrower agrees to pay interest in respect of the
unpaid principal amount of each C$ Eurodollar Loan made to the Canadian Borrower
from the date the proceeds thereof are made available to the Canadian Borrower
until the earlier of (i) the maturity (whether by acceleration or otherwise) of
such C$ Eurodollar Loan and (ii) the conversion of such C$ Eurodollar Loan
pursuant to Section 1.10, as applicable, at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of the Applicable
Margin plus the Eurodollar Rate for such Interest Period.
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to $ Base Rate Loans
from time to time and (y) the rate which is 2% in excess of the rate then borne
by such Loan, in each case with such interest to be payable on demand.
(e) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each $ Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(f) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for the respective Interest Period or
Interest Periods and shall promptly notify the applicable Borrower and the Banks
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time it gives a Notice of Borrowing or
----------------
Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day (or the fourth Business Day in the case of a C$
Eurodollar Loan) prior to the expiration of an Interest Period applicable to
such Eurodollar Loan (in the case of any subsequent Interest Period), the
applicable Borrower shall have the right to elect, by giving the Administrative
Agent notice thereof, the interest period (each an "Interest Period") applicable
to such Eurodollar Loan, which Interest Period shall, at the option of such
Borrower, be a one, two, three or six-month or, to the extent available to each
Bank, nine or twelve month period, provided that:
--------
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including, in
the case of $ Eurodollar Loans, the date of any conversion thereto from a $
Base Rate Loan) and each Interest Period occurring thereafter in respect of
such Eurodollar Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for
-------- -------
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
6
(v) upon the occurrence and during the continuance of any Event
of Default, no Interest Period may be selected if the Administrative Agent
(acting at the instruction of the Required Banks) has notified the
applicable Borrower that selections of Interest Periods shall not be
permitted during the continuance of an Event of Default;
(vi) no Interest Period in respect of any Borrowing of Loans
shall be selected which extends beyond the Final Maturity Date; and
(vii) no Interest Period in respect of any Borrowing of any
Revolving Loans shall be selected which extends beyond any date upon which
a mandatory repayment of Revolving Loans will be required to be made under
Section 4.02(a), as a result of reductions to the Total Revolving Loan
Commitment pursuant to Section 3.03(b), unless the aggregate principal
amount of Revolving Loans which are $ Base Rate Loans or which have
Interest Periods which will expire on or before such date will be
sufficient to make such required repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of $ Eurodollar Loans, the Company has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such $ Eurodollar
Loans as provided above, the Company shall be deemed to have elected to convert
such $ Eurodollar Loans into $ Base Rate Loans, effective as of the expiration
date of such current Interest Period. If the Canadian Borrower has failed to
select an Interest Period for a C$ Eurodollar Loan at least four Business Days
prior to the expiration of the Interest Period applicable to such C$ Eurodollar
Loan, the Canadian Borrower shall be deemed to have selected a one month
Interest Period to apply such C$ Eurodollar Loan upon the expiration of the
current Interest Period therefor.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
--------------------------------
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on the
Notes or any other amounts payable hereunder (except for changes with
respect to any tax imposed on, or measured by the net income or net profits
of such Bank, or any franchise tax based on the net income or net profits
of a Bank, in either case pursuant to the laws of the jurisdiction in which
such Bank is organized or in which such Bank's principal office or
applicable lending office is located or any subdivision thereof or
therein), or (B) a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate and/or (y) other
circumstances since the date of this Agreement adversely affecting such
Bank or the interbank Eurodollar market or the position of such Bank in
such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good faith
with any governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market; or
7
(iv) at any time that Canadian Dollars are not available due to
market conditions in sufficient amounts, as determined in good faith by
such Bank, to fund any Borrowing of Revolving C$ Loans;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the applicable Borrower and, except in the case of clause (i) above,
to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (w) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the applicable
Borrower and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the applicable Borrower with respect to Eurodollar Loans
which have not yet been borrowed (including by way of conversion) shall be
deemed rescinded by the applicable Borrower, (x) in the case of clause (ii)
above the applicable Borrower shall pay to such Bank, upon written demand
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Bank in its sole
discretion shall determine) as shall be required to compensate such Bank for
such increased costs or reductions in amounts received or receivable hereunder
(a written notice as to the additional amounts owed to such Bank, showing the
basis for the calculation thereof, submitted to the applicable Borrower by such
Bank in good faith shall, absent manifest error, be final and conclusive and
binding on all the parties hereto), (y) in the case of clause (iii) above, the
applicable Borrower shall take one of the actions specified in Section 1.10(b)
as promptly as possible and, in any event, within the time period required by
law and (z) in the case of clause (iv) above, Revolving C$ Loans shall no longer
be available until such time as the Administrative Agent notifies the Canadian
Borrower and the Banks that the circumstances giving rise to such notice by the
applicable Bank no longer exists, and any Notice of Borrower given by the
Canadian Borrower with respect to Revolving C$ Loans which have not yet been
borrowed shall be deemed rescinded by the Canadian Borrower. Each of the
Administrative Agent and each Bank agrees that if it gives notice to a Borrower
of any of the events described in clause (i), (iii) or (iv) above, it shall
promptly notify the applicable Borrower and, in the case of any such Bank, the
Administrative Agent, if such event ceases to exist. If any such event
described in clause (iii) above ceases to exist as to a Bank, the obligations of
such Bank to make Eurodollar Loans and to convert $ Base Rate Loans into $
Eurodollar Loans on the terms and conditions contained herein shall be
reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the applicable Borrower
may (and in the case of a Eurodollar Loan affected by the circumstances
described in Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar
Loan is then being made initially or pursuant to a conversion, cancel the
respective Borrowing by giving the Administrative Agent telephonic notice
(confirmed in writing) on the same date that such Borrower was notified by the
affected Bank or the Administrative Agent pursuant to Section 1.10(a)(ii) or
(iii) or (y) if the affected Eurodollar Loan is then outstanding, upon at least
three Business Days (four Business Days in the case of Revolving C$ Loans)
written notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Loan into a $ Base Rate Loan, in the case of $ Eurodollar Loans,
or a Loan denominated in Canadian Dollars having an interest rate comparable to
the Base Rate as determined in the sole discretion of the affected Bank, in the
case of C$ Eurodollar Loans, as the case may be, provided that, if more than one
--------
Bank is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b). If at any time the making or continuance of
any Revolving C$ Loan, or any giving effect to the obligations of a Bank in
respect thereof, has been made unlawful by any law coming into force or by any
change since the date of this Agreement in any applicable law or regulation or
in the interpretation or application thereof by any court or any statutory board
or commission, then the Canadian Borrower, upon at least three Business Days'
written notice to the Administrative Agent and the affected Bank, and subject to
Section 4.02(b), shall repay such Revolving C$ Loan in full.
(c) If at any time any Bank determines that the introduction after
the Effective Date of, or any change after the Effective Date in, any applicable
law or governmental rule, regulation, order, guideline, directive or request
(whether or not having the force of law) concerning capital adequacy, or any
change after the Effective Date in interpretation or administration thereof by
any governmental authority, central bank or comparable agency, will have the
effect of increasing the amount of capital required or expected to be maintained
by such Bank or any corporation controlling such Bank, based on the existence of
such Bank's Commitments hereunder or
8
its obligations hereunder, then the Company shall pay to such Bank, within 15
days after its written demand therefor, such additional amounts as shall be
required to compensate such Bank or such other corporation for the increased
cost to such Bank or such other corporation or the reduction in the rate of
return to such Bank or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Bank will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable, provided that such Bank's reasonable good faith determination of
--------
compensation owing under this Section 1.10(c) shall, absent manifest error, be
final and conclusive and binding on all the parties hereto. Each Bank, upon
determining that any additional amounts will be payable pursuant to this Section
1.10(c), will give prompt written notice thereof to the Company, which notice
shall show the basis for calculation of such additional amounts, although the
failure to give any such notice shall not release or diminish any Borrower's
Obligations to pay additional amounts pursuant to this Section 1.10(c). A
Borrower shall not be required to pay additional amounts pursuant to this
Section 1.10(c) unless it has received the written notice described in the prior
sentence (which notice need not be given during an Event of Default under
Section 11.05).
(d) In the event that any Bank shall determine (which determination
shall, absent manifest error, be final and conclusive and binding on all parties
hereto) at any time that such Bank is required to maintain reserves (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) which have been established by any Federal,
state, local or foreign court or governmental agency, authority, instrumentality
or regulatory body with jurisdiction over such Bank (including any branch,
Affiliate or funding office thereof) in respect of any Revolving C$ Loans or any
category of liabilities which includes deposits by reference to which the
interest rate on any Revolving C$ Loan is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of any Bank to non-United States residents, then, unless such reserves
are included in the calculation of the interest rate applicable to such
Revolving C$ Loans or in Section 1.10(a)(ii), such Bank shall promptly notify
the Canadian Borrower in writing specifying the additional amounts required to
indemnify such Bank against the cost of maintaining such reserves (such written
notice to provide in reasonable detail in computation of such additional
amounts) and the Canadian Borrower shall pay to such Bank such specified amounts
as additional interest at the time that the Canadian Borrower is otherwise
required to pay interest in respect of such Revolving C$ Loan or, if later, on
written demand therefor by such Bank.
1.11 Compensation. Each applicable Borrower shall compensate each
------------
Bank, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans, but excluding any loss of
anticipated profit) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the applicable Borrower or deemed withdrawn pursuant to Section
1.10(a)); (ii) if any repayment (including any repayment made pursuant to
Section 4.01 or 4.02 or as a result of an acceleration of the Revolving Loans
pursuant to Section 11), prepayment or conversion of any Eurodollar Loans occurs
on a date which is not the last day of an Interest Period with respect thereto;
(iii) if any prepayment of any of the Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the applicable Borrower or on the
date that such prepayment is required under this Agreement; or (iv) as a
consequence of any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 1.10(d), Section 2.06 or Section 4.04 with
respect to such Bank, it will, if requested by the Company, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit
affected by such event, provided that such designation is made on such terms
--------
that such Bank and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of such Section. Nothing in this Section 1.12 shall
affect or postpone any of the obligations of any Borrower or the right of any
Bank provided in Sections 1.10, 2.06 and 4.04.
9
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank
or otherwise defaults in its obligations to make Loans or Mandatory Borrowings
or fund Unpaid Drawings, (y) upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or
Section 4.04 with respect to any Bank which results in such Bank charging to any
Borrower increased costs in excess of those being generally charged by the other
Banks, or (z) as provided in Section 14.12(b) in the case of certain refusals by
a Bank to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Company shall have the right, if no Default or Event of
Default will exist immediately after giving effect to such replacement, to
replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank"), and in the case of an
Eligible Transferee which is not then a Bank under this Agreement, each of whom
shall be required to be reasonably acceptable to the Administrative Agent,
provided, that:
--------
(i) at the time of any replacement pursuant to this Section
1.13, the Replaced Bank and the Replacement Bank shall enter into one or
more Assignment and Assumption Agreements pursuant to Section 14.04(b) (and
with all fees payable pursuant to said Section 14.04(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall acquire the
Commitments and all outstanding Loans of, and in each case participations
in Letters of Credit by, the Replaced Bank and, in connection therewith,
shall pay, in the applicable Currency, to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (A) an amount equal to the principal
of, and are accrued interest on, all outstanding Loans of the Replaced
Bank, (B) an amount equal to all Unpaid Drawings that have been funded by
(and not reimbursed to) such Replaced Bank, together with all then unpaid
interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01, and (y) the Issuing Bank an amount equal to such Replaced
Bank's Adjusted Percentage (for this purpose, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence
had been made with respect to such Replaced Bank) of any Unpaid Drawing
(which at such time remains an Unpaid Drawing) with respect to a Letter of
Credit issued by it to the extent such amount was not theretofore funded by
such Replaced Bank; and
(ii) all obligations of the Borrowers owing to the Replaced
Bank (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid) accrued through the date of replacement shall be paid in full
to such Replaced Bank concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (i) and (ii) above, and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Notes executed by the respective Borrowers, (x) the Replacement Bank
shall become a Bank hereunder and the Replaced Bank shall cease to constitute a
Bank hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04 and
14.01), which shall survive as to such Replaced Bank and (y) in the case of a
replacement of a Defaulting Bank with a Non-Defaulting Bank, the Adjusted
Percentages of the Banks shall be automatically adjusted at such time to give
effect to such replacement (and to give effect to the replacement of a
Defaulting Bank with one or more Non-Defaulting Banks).
1.14 Joint and Several Obligations. The Company shall be jointly and
-----------------------------
severally obligated as a primary obligor for the obligations of the Canadian
Borrower under this Agreement.
SECTION 2. Letters of Credit.
-----------------
1.021 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions set forth herein, each Borrower may request the Issuing Bank to
issue, at any time and from time to time on and after the Initial Borrowing Date
and prior to (i) the third Business Day preceding the Final Maturity Date in the
case of standby Letters of Credit or (ii) the 30th day preceding the Final
Maturity Date in the case of trade Letters of Credit, (x) for the account of
such Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Indebtedness,
irrevocable standby letters of credit in a
10
form customarily used by the Issuing Bank or in such other form as has been
approved by the Issuing Bank in support of such L/C Supportable Indebtedness and
(y) for the account of such Borrower and for the benefit of sellers of goods to
the Company or any of its Subsidiaries, irrevocable sight trade letters of
credit in a form customarily used by the Issuing Bank or in such other form as
has been approved by the Issuing Bank (each such standby letter of credit and
trade letter of credit, a "Letter of Credit" and collectively, the "Letters of
Credit"). All Letters of Credit shall be denominated in Dollars.
(b) The Issuing Bank hereby agrees that it will (subject to the terms
and conditions contained herein), at any time and from time to time on and after
the Initial Borrowing Date and prior to (i) the third Business Day preceding the
Final Maturity Date in the case of standby Letters of Credit or (ii) the 30th
day preceding the Final Maturity Date in the case of trade Letters of Credit, in
each case following its receipt of the respective Letter of Credit Request,
issue for the account of a Borrower one or more Letters of Credit in support of
such sellers of goods referred to in Section 2.01(a)(y) or such L/C Supportable
Indebtedness as is permitted to remain outstanding without giving rise to a
Default or an Event of Default hereunder; provided that the Issuing Bank shall
--------
be under no obligation to issue any Letter of Credit if at the time of such
issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over the Issuing Bank shall prohibit, or request that the Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which the Issuing Bank is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Bank as of the date hereof
and which the Issuing Bank in good xxxxx xxxxx material to it;
(ii) the Issuing Bank shall have received notice from the
Required Banks prior to the issuance of such Letter of Credit of the type
described in the last sentence of Section 2.03(b); or
(iii) a Bank Default exists unless the Issuing Bank has
entered into arrangements satisfactory to it and the Company to eliminate
the Issuing Bank's risk with respect to the Bank which is the subject of
the Bank Default, including by cash collateralizing such Bank's Adjusted
Percentage of the Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $50,000,000 or (y) when added to the Dollar Equivalent Amount
of the aggregate principal amount of all Revolving Loans and Swingline Loans
made by Non-Defaulting Banks then outstanding, an amount equal to the Adjusted
Total Revolving Loan Commitment then in effect, (ii)(x) each standby Letter of
Credit shall by its terms terminate on or before the date which occurs twelve
months after the date of the issuance thereof (although each standby Letter of
Credit may be extendable for successive periods of up to twelve months, but not
beyond the third Business Day preceding the Final Maturity Date, on terms
acceptable to the Issuing Bank) and (y) each trade Letter of Credit shall by its
terms terminate on or before the date occurring not later than 180 days after
such trade Letter of Credit's date of issuance and (iii) (x) no standby Letter
of Credit shall have an expiry date occurring later than the third Business Day
preceding the Final Maturity Date and (y) no trade Letter of Credit shall have
an expiry date occurring later than 30 days prior to the Final Maturity Date.
1.022 Minimum Stated Amount. The initial Stated Amount of each Letter
---------------------
of Credit shall be not less than $100,000 or such lesser amount as is acceptable
to the Issuing Bank, provided that in each calendar quarter up to five Letters
--------
of Credit may be issued having an initial Stated Amount of greater than $10,000
and less than $100,000.
1.023 Letter of Credit Requests. (a) Whenever a Borrower desires that
-------------------------
a Letter of Credit be issued for its account, such Borrower shall give the
Administrative Agent and the Issuing Bank at least five
11
Business Days' (or such shorter period as is acceptable to the Issuing Bank in
any given case) written notice prior to the proposed date of issuance (which
shall be a Business Day). Each notice shall be in the form of Exhibit C (each a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the applicable Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.01(c). Unless the Issuing Bank has received notice from the
Required Banks before it issues a Letter of Credit that one or more of the
conditions specified in Section 5, 6 or 7, as the case may be, are not then
satisfied, or that the issuance of such Letter of Credit would violate Section
2.01(c), then the Issuing Bank shall issue the requested Letter of Credit for
the account of such Borrower in accordance with the Issuing Bank's usual and
customary practices.
1.024 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be
deemed to have sold and transferred to each Bank, other than the Issuing Bank
(each such Bank, in its capacity under this Section 2.04, a "Participant"), and
each such Participant shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's
Adjusted Percentage, in such Letter of Credit, each substitute letter of credit,
each drawing made thereunder and the obligations of the Borrower for whose
account such Letter of Credit was issued under this Agreement with respect
thereto, and any security therefor or guaranty pertaining thereto. Upon any
change in the Revolving Loan Commitments or Adjusted Percentages of the Banks
pursuant to Section 1.13 or 14.04 or as a result of a Bank Default, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Adjusted Percentages of the assignor and
assignee Bank or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the Issuing Bank under or in connection with any Letter
of Credit issued by it, if taken or omitted in the absence of gross negligence
or willful misconduct, shall not create for the Issuing Bank any resulting
liability to the Borrower for whose account such Letter of Credit was issued or
any Bank.
(c) In the event that the Issuing Bank makes any payment under any
Letter of Credit issued by it and the Borrower for whose account such Letter of
Credit was issued shall not have reimbursed such amount in full to the Issuing
Bank pursuant to Section 2.05(a), the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Participant's Adjusted Percentage of such unreimbursed payment in Dollars and in
same day funds. If the Administrative Agent so notifies, prior to 11:00 A.M.
(New York time) on any Business Day, any Participant required to fund a payment
under a Letter of Credit, such Participant shall make available to the
Administrative Agent at the Payment Office of the Administrative Agent for the
account of the Issuing Bank in Dollars such Participant's Adjusted Percentage of
the amount of such payment on such Business Day in same day funds. If and to
the extent such Participant shall not have so made its Adjusted Percentage of
the amount of such payment available to the Administrative Agent for the account
of the Issuing Bank, such Participant agrees to pay to the Administrative Agent
for the account of the Issuing Bank, forthwith on demand such amount, together
with interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent for the account of the Issuing Bank at the
overnight Federal Funds Rate. The failure of any Participant to make
available to the Administrative Agent for the account of the Issuing Bank its
Adjusted Percentage of any payment under any Letter of Credit issued by it shall
not relieve any other Participant of its obligation hereunder to make available
to the Administrative Agent for the account of the Issuing Bank its Adjusted
Percentage of any such Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Administrative Agent for the account of the
Issuing Bank such other Participant's Adjusted Percentage of any such payment.
12
(d) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
the Issuing Bank any payments from the Participants pursuant to clause (c)
above, the Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay each Participant which has paid its
Adjusted Percentage thereof, in Dollars and in same day funds, an amount equal
to such Participant's share (based on the proportionate aggregate amount funded
by such Participant to the aggregate amount funded by all Participants) of the
principal amount of such reimbursement obligation and interest thereon accruing
after the purchase of the respective participations.
(e) Immediately after the issuance of, or amendment to, a standby
Letter of Credit, the Issuing Bank shall immediately notify the Administrative
Agent and each Participant of such issuance or amendment, as the case may be,
and such notice shall be accompanied by a copy of the issued standby Letter of
Credit or amendment, as the case may be.
(f) The obligations of the Participants to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to Letters
of Credit issued by it shall be irrevocable and not subject to any qualification
or exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any other Credit Document;
(ii) the existence of any claim, setoff, defense or other right
which the Company or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Bank, the Issuing Bank, any Participant, or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Company or any of its
Subsidiaries and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
1.025 Agreement to Repay Letter of Credit Drawings. (a) Each Borrower
--------------------------------------------
for whose account a Letter of Credit is issued hereby agrees to reimburse the
Issuing Bank, by making payment to the Administrative Agent in immediately
available funds at the Payment Office (or by making the payment directly to the
Issuing Bank at such location as may otherwise have been agreed upon by the
Company and the Issuing Bank), for any payment or disbursement made by the
Issuing Bank under such Letter of Credit (each such amount so paid until
reimbursed, an "Unpaid Drawing"), immediately after, and in any event on the
date of, such payment or disbursement, with interest on the amount so paid or
disbursed by the Issuing Bank, to the extent not reimbursed prior to 12:00 Noon
(New York time) on the date of such payment or disbursement, from and including
the date paid or disbursed to but excluding the date the Issuing Bank is
reimbursed by the applicable Borrower therefor at a rate per annum which shall
be the sum of the Applicable Margin plus the Base Rate in effect from time to
time, provided, however, to the extent such amounts are not reimbursed prior to
-------- -------
12:00 Noon (New York time) on the third Business Day following notice to the
Company by the Administrative Agent or the Issuing Bank of such payment or
disbursement, interest shall thereafter accrue on the amounts so paid or
disbursed by the Issuing Bank (and until reimbursed by the applicable Borrower)
at a rate per annum which shall be the sum of the Applicable Margin plus the
Base Rate in effect from time to time plus 2%, in each such case, with interest
to be payable on demand, it being understood and agreed, however, that the
notice referred to in the immediately preceding proviso shall not be required to
be given if a Default or an Event of Default under Section 11.05 shall have
occurred and be continuing (in which case the Unpaid Drawings shall bear
interest at the rate provided in the foregoing proviso
13
from the third Business Day following the respective payment or disbursement).
The Issuing Bank shall give the Company prompt notice of each Drawing under any
Letter of Credit, provided that the failure to give any such notice shall in no
way affect, impair or diminish either Borrower's obligations hereunder.
(b) The obligation of each applicable Borrower under this Section
2.05 to reimburse the Issuing Bank with respect to Unpaid Drawings (including,
in each case, interest thereon) shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Company or any of its Subsidiaries may have or have had
against any Bank (including in its capacity as Issuing Bank, or as Participant),
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit (each a "Drawing") to conform to the terms of such
Letter of Credit or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing; provided, however, that a Borrower shall not be
-------- -------
obligated to reimburse the Issuing Bank for any wrongful payment made by the
Issuing Bank under a Letter of Credit issued by it as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Issuing Bank. Any action taken or omitted to be taken by the Issuing Bank under
or in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Issuing Bank
any resulting liability to either Borrower.
1.026 Increased Costs. If at any time the Issuing Bank or any
---------------
Participant determines that the introduction after the Effective Date of or any
change after the Effective Date in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by the Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law), or
any change after the Effective Date in generally acceptable accounting
principles shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against letters of credit
issued by the Issuing Bank or participated in by any Participant, or (ii) impose
on the Issuing Bank or any Participant any other conditions relating, directly
or indirectly, to this Agreement or any Letter of Credit, and the result of any
of the foregoing is to increase the cost to the Issuing Bank or any Participant
of issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by the Issuing Bank or any Participant
hereunder with respect to Letters of Credit or reduce the rate of return on its
capital with respect to Letters of Credit, then, upon demand to the Company by
the Issuing Bank or any Participant (a copy of which demand shall be sent by the
Issuing Bank or such Participant to the Administrative Agent), the Company shall
pay to the Issuing Bank or such Participant such additional amount or amounts as
will compensate such Bank for such increased cost or reduction in the amount
receivable or reduction on the rate of return on its capital. The Issuing Bank
or any Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.06, will give prompt written notice thereof to the
Company, which notice shall include a certificate submitted to the Company by
the Issuing Bank or such Participant (a copy of which certificate shall be sent
by the Issuing Bank or such Participant to the Administrative Agent), setting
forth in reasonable detail the basis for the calculation of such additional
amount or amounts necessary to compensate the Issuing Bank or such Participant,
although failure to give any such notice shall not release or diminish the
Company's obligations to pay additional amounts pursuant to this Section 2.06.
The certificate required to be delivered pursuant to this Section 2.06 shall,
absent manifest error, be final, conclusive and binding on the Company. The
Company shall not be required to pay additional amounts pursuant to this Section
2.06 unless it has received the written notice described in the second preceding
sentence (which notice need not be given during an Event of Default under
Section 11.05).
SECTION 3. Fees: Reductions of Commitment.
------------------------------
1.031 Fees. (a) The Company agrees to pay to the Administrative Agent
----
for distribution to each Non-Defaulting Bank a commitment commission (the
"Commitment Commission") for the period from the Effective Date to but not
including the Final Maturity Date (or such earlier date as the Total Revolving
Loan Commitment shall have been terminated), computed at a rate per annum equal
to the rate set forth under the column captioned "Commitment Fee" in the
definition of "Applicable Margin" set forth in Section 12.01 hereof, as in
effect from time to time, on the Unutilized Revolving Loan Commitment of such
Non-Defaulting Bank as in effect from time to time. Accrued and unpaid
Commitment Commission shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Final Maturity Date or such earlier date upon
which the Total Revolving Loan Commitment is terminated.
14
(b) The Company agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Bank (based on their respective Adjusted
Percentages) a fee in respect of each Letter of Credit issued hereunder (the
"Letter of Credit Fee"), for the period from and including the date of issuance
of such Letter of Credit to and including the termination of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin for $
Eurodollar Loans, as in effect, from time to time, on the daily Stated Amount of
such Letter of Credit. Accrued and unpaid Letter of Credit Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
termination of the Total Revolving Loan Commitment or the first day thereafter
upon which no Letters of Credit remain outstanding.
(c) The Company agrees to pay to the Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued for its own
account hereunder (the "Facing Fee"), for the period from and including the date
of issuance of such Letter of Credit to and including the termination of such
Letter of Credit, equal to the higher of (i) $500 (the "Minimum Facing Fee") and
(ii) the rate per annum agreed to in writing by the Issuing Bank in respect of
such Letter of Credit, on the daily Stated Amount of such Letter of Credit. The
Minimum Facing Fee, if applicable, is due and payable on the date of issuance of
such Letter of Credit and each annual anniversary date or extension date
thereof. In addition, all other accrued Facing Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and upon the termination of
the Total Revolving Loan Commitment or the first day thereafter upon which no
Letters of Credit remain outstanding.
(d) The Company agrees to pay to the Issuing Bank, for its own
account, upon each payment under, issuance of, or amendment to, any Letter of
Credit such amount as shall at the time of such event be the administrative
charge and expense which the Issuing Bank generally imposes in connection with
such occurrence with respect to letters of credit.
(e) The Company agrees to pay to each Agent, for such Agent's own
account, such other fees as have been agreed to in writing by the Company and
such Agent.
1.032 Voluntary Termination of Unutilized Commitments. (a) Upon at
-----------------------------------------------
least three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks),
the Company shall have the right, at any time or from time to time, without
premium or penalty, to terminate the Total Unutilized Revolving Loan Commitment,
in whole or in part, in integral multiples of $1,000,000 in the case of partial
reductions to the Total Unutilized Revolving Loan Commitment, provided that (v)
--------
each reduction shall apply to reduce the then remaining Scheduled Commitment
Reductions pro rata based upon the then remaining amount of such Scheduled
--------
Commitment Reductions after giving effect to all prior reductions thereto, (w)
each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank, (x) the reduction to the Total
Unutilized Revolving Loan Commitment shall in no case be in an amount which
would cause the Revolving Loan Commitment of any Bank to be reduced by an amount
which exceeds the Unutilized Revolving Loan Commitment of such Bank as in effect
immediately before giving effect to such reduction, (y) each such reduction of
the Total Revolving Loan Commitment shall reduce the Total Revolving C$ Loan
Commitments ratably and (z) each such reduction shall apply proportionately to
permanently reduce the Revolving C$ Loan Commitment of each Bank.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
14.12(b), the Company may, upon five Business Days' prior written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks) and subject to obtaining the
consents required by Section 14.12(b) terminate all of the Revolving Loan
Commitment of such Bank so long as all Loans, together with accrued and unpaid
interest, Fees and all other amounts owing to such Bank are repaid concurrently
with the effectiveness of such termination pursuant to Section 4.01(b) (at which
time Schedule I shall be deemed modified to reflect such changed amounts), and
at such time, such Bank shall no longer constitute a "Bank" for purposes of this
Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 14.01 and
14.06), which shall survive as to such repaid Bank.
15
1.033 Mandatory Reduction of Commitments. (a) The Total Revolving
----------------------------------
Loan Commitment (and the Revolving Loan Commitment and Swingline Commitment of
each Bank) shall terminate in its entirety on August 30, 1996 unless the Initial
Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03 on each date set forth below, the Total Revolving
Loan Commitment shall be reduced by the amount set forth opposite such date
(each such reduction as the same may be reduced as provided in Sections 3.02(a)
and 3.03(g), a "Scheduled Commitment Reduction" and each such date, a "Scheduled
Commitment Reduction Date"):
Scheduled Commitment Reduction Date Amount
----------------------------------- ------
August 15, 1998 $ 7,500,000
February 15, 1999 7,500,000
August 15, 1999 10,000,000
February 15, 2000 10,000,000
August 15, 2000 10,000,000
February 15, 2001 10,000,000
August 15, 2001 10,000,000
February, 2002 10,000,000
Final Maturity Date 75,000,000
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date on and after the Effective Date upon
which any Subsidiaries of the Company or any Joint Ventures receives any
proceeds from any capital contribution or any sale or issuance of its equity
(but excluding proceeds from capital contributions to, or equity investments in,
any Subsidiary or Joint Venture of the Company to the extent made by the
Company, any other Subsidiary of the Company or the respective joint venture
partner of such Joint Venture), the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to 50% of the Net Cash Proceeds of the
respective capital contribution or sale or issuance (or in the case of any
capital contribution to, or any sale or issuance of equity by, any Joint
Venture, the Total Revolving Loan Commitment shall be permanently reduced by an
amount equal to 50% of the Company's Allocable Share of such Net Cash Proceeds
(but, in the case of a Joint Venture in which the Company or a Subsidiary
thereof does not control the timing of distributions by such Joint Venture, only
as and when such Net Cash Proceeds are distributed by such Joint Venture to the
Company or a Wholly-Owned Subsidiary thereof)), in each case in accordance with
the requirements of Section 3.03(g); provided that, so long as no Default or
--------
Event of Default then exists, the Total Revolving Loan Commitment shall not be
required to be reduced pursuant to the requirements of this Section 3.03(c) at
any time to an amount which is less than the Guaranty Amount then in effect.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date on and after the Effective Date upon
which the Company or any of its Subsidiaries or Joint Ventures receives Cash
Proceeds from any Asset Sale, the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to 100% of the Net Cash Proceeds
therefrom (or, in the case of any Asset Sale by a Joint Venture, the Total
Revolving Loan Commitment shall be permanently reduced by an amount equal to
100% of the Company's Allocable Share of such Net Cash Proceeds (but, in the
case of a Joint Venture in which the Company or a Subsidiary thereof does not
control the timing of distributions by such Joint Venture, only as and when such
Net Cash Proceeds are distributed by such Joint Venture to the Company or a
Wholly-Owned Subsidiary thereof)) in each case in accordance with the
requirements of Section 3.03(g), provided that so long as no Default or Event of
--------
Default then exists, (i) the Net Cash Proceeds of any Asset Sale pursuant to
Section 10.02(ii) shall not be required to reduce the Total Revolving Loan
Commitment on the date of receipt thereof to the extent that the Company has
delivered a certificate to the Administrative Agent on or prior to such date
stating that it intends to reinvest such Net Cash Proceeds in equipment or
materials within 365 days after the respective date of sale or, in lieu thereof,
commit to so invest such Net Cash Proceeds within 365 days after such date of
sale and actually expend the funds pursuant to such commitment within 365 days
after such date of sale, and (ii) the Net Cash Proceeds from the sale of any
Existing Investment, the sale of the equity interests in any Joint Venture, the
sale of any Hotel Property or from any Recovery Event shall not be required to
reduce the Total Revolving Loan Commitment on the date of
16
receipt thereof to the extent that (A) the Company delivers a certificate to the
Administrative Agent stating that it intends to utilize the Net Cash Proceeds
therefrom to make Permitted Hotel Acquisitions pursuant to Sections 10.02(ix)
and/or 10.05(viii) (and/or, in the case of the Net Cash Proceeds from a Recovery
Event, to replace or restore any properties or assets in respect of which such
proceeds are paid), other Investments permitted under Section 10.05 or Capital
Expenditures permitted under Section 10.07 within 365 days after the date of the
respective Asset Sale, or make Investment Commitments for a Permitted Hotel
Acquisition within 365 days after the date of the respective Asset Sale and
actually make the respective Permitted Hotel Acquisition (or effect such
replacement or restoration, as the case may be), Investment or Capital
Expenditure within 365 days after the date of the respective Asset Sale and (B)
after giving effect to any election pursuant to this clause (ii), the
Reinvestment Amount shall at no time outstanding exceed $25,000,000, provided,
--------
further, that with respect to each of clauses (i) and (ii) of the immediately
-------
preceding proviso, if all or any portion of the Net Cash Proceeds of the
respective Asset Sale are not in fact utilized for the purposes permitted by
said clauses within 365 days after the respective date of such Asset Sale (or
committed to be so used within 365 days and actually applied within 365 days
after the date of the respective Asset Sale), then on such 365th day after the
date of the respective Asset Sale, the amount of Net Cash Proceeds not actually
applied for the purposes permitted by said clauses (i) and (ii) shall be used to
permanently reduce the Total Revolving Loan Commitment as otherwise required by
this Section 3.03(d) in the absence of the immediately preceding proviso.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03. on the first date on and after the Effective Date
on which (i) the long term senior unsecured debt credit rating of HFS shall have
been reduced to a level equal to or below BBB- by S&P and/or be unrated by S&P
and (ii) the long term senior unsecured debt rating of the Company shall have
---
been reduced to a level equal to or below BBB- by S&P and/or be unrated by S&P,
both of which downgradings and/or failures to be rated shall have continued for
at least 30 consecutive days, the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to $37,500,000 in accordance with the
requirements of Section 3.03(g).
(f) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on the first date on and after the Effective Date
on which (i) the long term senior unsecured debt credit rating of HFS shall have
been reduced to a level below BBB- by S&P and/or be unrated by S&P and (ii) the
---
long term senior unsecured debt rating of the Company shall have been reduced to
a level below BBB- by S&P and/or be unrated by S&P, both of which downgradings
and/or failures to be rated shall have continued for at least 30 consecutive
days, the Total Revolving Loan Commitment shall be permanently reduced by an
amount equal to $75,000,000 (less any amount by which the Total Revolving Loan
Commitment had already been reduced pursuant to clause (e) above) in accordance
with the requirements of Section 3.03(g).
(g) The amount of each reduction to the Total Revolving Loan
Commitment made as required by (A) Sections 3.03(c) and (d) shall be applied to
reduce the then remaining Scheduled Commitment Reductions pro rata based on the
--- ----
then remaining amounts of such Scheduled Commitment Reductions after giving
effect to all prior reductions thereto and (B) Sections 3.03(e) and (f) shall be
applied to reduce the then remaining Scheduled Commitment Reductions in inverse
order of maturity.
(h) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Final Maturity Date.
(i) The Swingline Commitment shall terminate on the Swingline Expiry
Date.
(j) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on the 15th day after each date on which any
Change of Control occurs, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate in its entirety, in each case
unless the Supermajority Banks otherwise agree in writing in their sole
discretion.
(k) Each reduction to the Total Revolving Loan Commitment pursuant
to (i) this Section 3.03 shall be applied proportionately to reduce the
Revolving Loan Commitment of each Bank or (ii) Section 3.02 or this
17
Section 3.03 shall reduce the Swingline Commitment to the extent the Total
Revolving Loan Commitment would otherwise exceed the Swingline Commitment.
(l) Each reduction to the Total Revolving Loan Commitment shall (i)
reduce the Total Revolving C$ Loan Commitment ratably and (ii) be applied
proportionately to reduce the Revolving C$ Loan Commitment of each Bank. Each
termination of the Total Revolving Loan Commitment shall terminate the Total
Revolving C$ Loan Commitment (and the Revolving C$ Loan Commitment of each Bank)
in its entirety.
SECTION 4. Prepayments; Payments; Taxes.
----------------------------
1.041 Voluntary Prepayments. (a) Each Borrower shall have the right to
---------------------
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions:
(i) the applicable Borrower shall give the Administrative
Agent prior to 12:00 Noon (New York time) at its Notice Office (x) at least
one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of such Borrower's intent to prepay $ Base Rate Loans
(or 11:00 A.M. on the date of prepayment, in the case of Swingline Loans),
(y) at least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of such Borrower's intent to prepay $
Eurodollar Loans and (z) at least four Business Days prior written notice
(or telephone notice promptly confirmed in writing) of such Borrower's
intent to prepay C$ Eurodollar Loans, the amount of such prepayment and the
Types of Revolving Loans to be prepaid, whether such Loans are Revolving $
Loans, Revolving C$ Loans or Swingline Loans, and, in the case of
Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the Administrative Agent shall promptly transmit to each
of the Banks;
(ii) each prepayment shall be in an aggregate principal amount
of at least (A) $500,000 in the case of Revolving $ Loans, (B) $50,000 in
the case of Swingline Loans and (C) C$500,000 in the case of Revolving C$
Loans; provided, that (A) if any partial prepayment of $ Eurodollar Loans
--------
made pursuant to any Borrowing shall reduce the outstanding $ Eurodollar
Loans made pursuant to such Borrowing to an amount less than $1,000,000,
then such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of $ Base Rate Loans and any election of
an Interest Period with respect thereto given by the applicable Borrower
shall have no force or effect and (B) no such prepayment may be made which
reduces the outstanding C$ Eurodollar Loans made pursuant to a Borrowing to
less than C$ $1,000,000; and
(iii) each prepayment in respect of any Revolving Loans made
pursuant to a Borrowing shall be applied pro rata among such Revolving
--- ----
Loans, provided that, at the applicable Borrower's election in connection
--------
with any prepayment of Revolving Loans pursuant to this Section 4.01(a),
such prepayment shall not be applied to any Revolving Loan of a Defaulting
Bank.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
14.12(b), the Company shall have the right, upon five Business Days' prior
written notice to the Administrative Agent at its Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks) to repay
all Loans, together with accrued and unpaid interest, Fees, and other amounts
owing to such Bank in accordance with said Section 14.12(b) so long as (A) in
the case of the repayment of Loans of any Bank pursuant to this clause (b) the
Commitments of such Bank are terminated concurrently with such repayment
pursuant to Section 3.02(b) (at which time Schedule I shall be deemed modified
to reflect the changed Revolving Loan Commitments) and (B) the consents required
by Section 14.12(b) in connection with the repayment pursuant to this clause (b)
have been obtained.
1.042 Mandatory Payments. (a) (i) On any day on which the sum of
------------------
the Dollar Equivalent Amount of the aggregate outstanding principal amount of
Swingline Loans and Revolving Loans made by Non-Defaulting Banks and the Letter
of Credit Outstandings exceeds the Adjusted Total Revolving Loan
18
Commitment as then in effect, the Company shall prepay on such day principal of
the Swingline Loans and, after the Swingline Loans have been paid in full,
Unpaid Drawings and, after Unpaid Drawings have been paid in full, Revolving
Loans of Non-Defaulting Banks in an amount equal to such excess. If, after
giving effect to the prepayment of all Swingline Loans, Unpaid Drawings and
Revolving Loans of Non Defaulting Banks, the aggregate amount of the Letter of
Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then
in effect, the Company shall pay to the Administrative Agent at the Payment
Office on such date an amount of cash or Cash Equivalents equal to the amount of
such excess (up to a maximum amount equal to the Letter of Credit Outstandings
at such time), such cash or Cash Equivalents to be held as security for all
obligations of the Company to Non-Defaulting Banks hereunder in a cash
collateral account to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal
amount of Revolving C$ Loans made by Non-Defaulting Banks exceeds the Adjusted
Total Revolving C$ Loan Commitment as then in effect, the Canadian Borrower
shall prepay on such day principal of the Revolving C$ Loans of Non-Defaulting
Banks in an amount equal to such excess.
(iii) The Administrative Agent may determine the Dollar
Equivalent Amount of the Revolving Loans at any time. Each such determination
shall, absent manifest error, be final, conclusive and binding on the Canadian
Borrower.
(b) With respect to each repayment of Loans required by this Section
4.02, the applicable Borrower may designate the Types of Loans which are
required to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made, provided that: (i) if any
--------
repayment of $ Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding $ Eurodollar Loans made pursuant to such Borrowing to an amount
less than $1,000,000, such Borrowing shall be converted at the end of the then
current Interest Period into a Borrowing of $ Base Rate Loans, (ii) if any
repayment of C$ Eurodollar Loans made pursuant to a single Borrowing would
reduce the outstanding C$ Eurodollar Loans made pursuant to such Borrowing to an
amount less than C$1,000,000, the consent of the Required Banks to such
repayment shall be obtained and (iii) except for differing treatments of
Defaulting Banks and Non-Defaulting Banks as expressly provided in Section
4.02(a), each repayment of Revolving Loans made pursuant to a Borrowing shall be
applied pro rata among such Revolving Loans; provided, that no repayment
--- ---- --------
pursuant to Section 4.02(a) shall be applied to any Revolving Loans of a
Defaulting Bank at any time when the aggregate amount of the Revolving Loans of
any Non-Defaulting Bank exceeds such Non-Defaulting Bank's Adjusted Percentage
of Revolving Loans then outstanding. In the absence of a designation by the
Company as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion.
(c) In addition to any other mandatory repayments required pursuant
to this Section 4.02, on the 15th day after each date on which any Change of
Control occurs, all outstanding Loans shall be required to be immediately repaid
in full and all Letter of Credit Outstandings shall be cash collateralized on
terms similar to those described in the last sentence of Section 4.02(a)(i), in
each case unless the Supermajority Banks otherwise agree in writing in their
sole discretion.
1.043 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Bank or Banks entitled
thereto not later than 12:00 Noon (New York time) on the date when due and shall
be made (i) in respect of all obligations other than principal and interest in
respect of Revolving C$ Loans, in Dollars in immediately available funds at the
Payment Office of the Administrative Agent and (ii) in respect of principal and
interest in respect of Revolving C$ Loans, in Canadian Dollars in immediately
available funds of the Payment Office of the Administrative Agent. The
principal of, and interest on, each Revolving C$ Loan shall be paid only in
Canadian Dollars. Whenever any payment to be made hereunder or under any Note
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest shall be payable at the applicable rate
during such extension.
1.044 Net Payments; Taxes. (a) All payments made by each Borrower
-------------------
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes,
19
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank, or any franchise tax
based on the net income or net profits of a Bank based solely on the amounts
specified in the preceding sentence, in either case pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Bank is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect to such non-excluded taxes, levies, imposts, duties, fees or other
charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the applicable Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, the applicable Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income or net profits of such Bank, or any franchise tax
based on the net income or net profits of a Bank based solely on the amounts
specified in the preceding sentence, in either case pursuant to the laws of the
jurisdiction in which such Bank is organized or in which the principal office or
applicable lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which such
Bank is organized or in which the principal office or applicable lending office
of such Bank is located and for any withholding of income or similar taxes
imposed by the United States of America as such Bank shall determine are payable
by, or withheld from, such Bank in each case in respect solely to such amounts
so paid to or on behalf of such Bank pursuant to the preceding sentence and in
respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Company will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by such Borrower. Each
Borrower agrees to indemnify and hold harmless each Bank, and reimburse such
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Company and the Administrative Agent on or prior to the
Effective Date, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 14.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit D (any such certificate, a "Section 4.04(b)(ii) Certificate") and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition, each
Bank agrees that from time to time after the Effective Date, when a lapse in
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Company and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Company and the Administrative Agent of its inability to deliver any
such Form or Certificate. Notwithstanding anything to the contrary contained in
Section 4.04(a), but subject to Section 14.04(b) and the immediately succeeding
sentence, (x) each Borrower shall be entitled, to the extent it is required to
do so by law, to deduct or withhold income or similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from interest, Fees or other amounts payable hereunder for the account
of any Bank which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the
extent that such Bank has not provided to the Company U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) neither Borrower shall be obligated pursuant to Section
4.04(a) to gross-up payments to be made to a Bank in
20
respect of income or similar taxes imposed by the United States if (I) such Bank
has not provided to the Company the Internal Revenue Service Forms required to
be provided to the Company pursuant to this Section 4.04(b) or (II) in the case
of a payment, other than interest, to a Bank described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 4.04 and except as set forth
in Section 14.04(b), each Borrower agrees to pay additional amounts and to
indemnify each Bank in the manner set forth in Section 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Initial Borrowing Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes.
SECTION 5. Conditions Precedent to Extensions of Credit on the
---------------------------------------------------
Initial Borrowing Date. The obligation of each Bank to make its Loans, and the
----------------------
obligation of the Issuing Bank to issue Letters of Credit, on the Initial
Borrowing Date, is subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions:
1.051 Execution of Agreement, Notes. On or prior to the Initial
-----------------------------
Borrowing Date (i) the Effective Date shall have occurred, (ii) there shall have
been delivered to the Administrative Agent for the account of each of the Banks
the appropriate Revolving $ Note executed by the Company, in the amount,
maturity and as otherwise provided herein, (iii) there shall have been delivered
to the Administrative Agent for the account of Chase the Swingline Note executed
by the Company, in the amount, maturity and as otherwise provided herein and
(iv) there shall have been delivered to the Administrative Agent for the amount
of each of the Banks the appropriate Revolving C$ Note executed by the Canadian
Borrower, in the amount, maturity and as otherwise provided herein.
1.052 Officer's Certificate. On the Initial Borrowing Date, the
---------------------
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Company by an Authorized Officer,
stating all of the conditions of 5.06, 5.13, 5.14, 5.15, 5.17, 7.01, 7.02 and
7.03 have been satisfied on such date.
1.053 Fees, etc. On the Initial Borrowing Date, the Company shall
----------
have paid to the Agents and the Banks all costs, fees and expenses (including,
without limitation, legal fees and expenses) payable to the Agents and the Banks
to the extent then due.
1.054 Opinion of Counsel. On the Initial Borrowing Date, the
------------------
Administrative Agent shall have received opinions addressed to the Agents and
each of the Banks and dated the Initial Borrowing Date, from (i) Skadden, Arps,
Slate, Xxxxxxx & Xxxx, special counsel to HFS, which opinion shall cover the
matters addressed in Exhibit M-1 hereto (ii) Battle Xxxxxx LLP, special counsel
to the Borrowers and the Subsidiary Guarantors, which opinion shall cover the
matters addressed in Exhibit M-2 hereto and (iii) the General Counsel to the
Borrowers and the Subsidiary Guarantors, which opinion shall cover the matters
addressed in Exhibit M-3 hereto.
1.055 Corporate Documents; Proceedings, etc. (a) On the Initial
--------------------------------------
Borrowing Date, the Administrative Agent shall have received a certificate,
dated the Initial Borrowing Date, signed by the President, any Vice President,
the Secretary or an Assistant Secretary of each Credit Party, in the form of
Exhibit E with appropriate insertions, together with copies of the certificate
of incorporation and by-laws or other organizational documents of each such
Credit Party and the resolutions of each such Credit Party referred to in such
certificates, and the foregoing shall be acceptable to the Administrative Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be satisfactory in form and substance to the
Agents and the Required Banks, and the Administrative Agent shall have received
all information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams, if any, which the Agents may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.
21
1.056 Refinancing. On the Initial Borrowing Date and after giving
-----------
effect to the Loans incurred on the Initial Borrowing Date, neither the Company
nor any of its Subsidiaries shall have any Indebtedness outstanding except for
(x) the Loans and Letters of Credit and (y) the Existing Indebtedness, which
Existing Indebtedness shall not exceed $10,000,000 in aggregate outstanding
principal amount. The Agents and the Required Banks shall be satisfied with the
amount of and the terms and conditions of (i) all Existing Indebtedness and (ii)
the repayment of all Indebtedness to be repaid in connection with the
transactions contemplated hereby (collectively, the "Refinancing") and the
amount of all accrued interest, premiums, fees, commissions and expenses owing
in connection with the Refinancing. The Refinancing shall have been effected in
accordance with the requirements of the immediately preceding sentence and all
Liens in connection with such refinanced Indebtedness shall have been terminated
(and all appropriate releases, termination statements or other instruments of
assignment with respect thereto shall have been obtained) to the satisfaction of
the Agents and the Required Banks. The Administrative Agent shall have received
copies, certified as true and complete by an appropriate officer of the Company,
of all documents executed in connection with the repayment of the Indebtedness
and the release of the Liens thereunder (collectively, the "Refinancing
Documents").
1.057 Pledge Agreement. On the Initial Borrowing Date, each Credit
----------------
Party (other than HFS) shall have duly authorized, executed and delivered a
Pledge Agreement in the form of Exhibit F (as modified, supplemented or amended
from time to time, the "Pledge Agreement") and shall have delivered to the
Collateral Agent, as Pledgee, all the Pledged Securities (which Pledged
Securities shall be required to include (to the extent provided in the Pledge
Agreement), on the Initial Borrowing Date, all capital stock, partnership and
Joint Venture interests and promissory notes owned by the Company and each
Subsidiary Guarantor on the Initial Borrowing Date), if any, referred to therein
then owned by such Credit Party, (x) endorsed in blank in the case of promissory
notes constituting Pledged Securities and (y) together with executed and undated
stock powers, in the case of capital stock constituting Pledged Securities.
1.058 Guaranties. On the Initial Borrowing Date, (i) HFS shall have
----------
duly authorized, executed and delivered a Guaranty in the form of Exhibit G-1
(as modified, amended or supplemented from time to time, the "HFS Guaranty"),
(ii) each Subsidiary Guarantor shall have duly authorized, executed and
delivered a Subsidiary Guaranty in the form of Exhibit G-2 (as modified, amended
or supplemented from time to time, the "Subsidiaries Guaranty") and (iii) the
Company shall have duly authorized, executed and delivered a Guaranty in the
form of Exhibit G-3 (as modified, amended or supplemented from time to time, the
"Company Guaranty").
1.059 Adverse Change. On the Initial Borrowing Date, since December
--------------
31, 1995 nothing shall have occurred (and the Banks shall not have become aware
of any facts, conditions or other information not previously known) which the
Agents or the Required Banks shall reasonably determine has had or could
reasonably expected to have a material adverse effect (i) on the Transaction,
(ii) on the rights or remedies of the Agents or the Banks, or on the ability of
any Credit Party to perform their respective obligations to the Agents and
the Banks, under the Credit Documents or (iii) on the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries taken
as a whole.
5.10 Litigation. On the Initial Borrowing Date, no litigation by any Person
----------
(private or governmental) shall be pending or, to the knowledge of any of
the Credit Parties, threatened with respect to (i) the Canadian Acquisition, the
making of the Loans or the Credit Documents or any documentation executed in
connection therewith or the transactions contemplated thereby except as set
forth on Schedule XI or (ii) which the Agents or the Required Banks shall
reasonably determine could have a materially adverse effect on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
5.11 Solvency Certificate and Insurance Certificates. On or prior to
-----------------------------------------------
the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent:
(i) a solvency certificate in the form of Exhibit H, addressed
to each of the Agents and each of the Banks and dated the Initial Borrowing
Date from an Authorized Financial Officer of the Company
22
providing the opinion of such Authorized Financial Officer as to the
solvency of each of the Company and its Subsidiaries on a consolidated
basis and the Canadian Borrower, in each case, after giving effect to the
Transaction and the financing therefor; and
(ii) certificates of insurance complying with the requirements
of Section 9.03 for the business and properties of the Company and its
Subsidiaries, in scope, form and substance satisfactory to the Agents and
the Required Banks.
5.12 Pro Forma Financial Information; Projections. (a) On the
--------------------------------------------
Initial Borrowing Date, the Banks shall have received the audited, the unaudited
and the pro forma financial information required by Section 8.05(a), which shall
--- -----
be in form and substance satisfactory to the Agents and the Required Banks. In
addition, the Banks shall have received such comfort with respect to the
preparation of such pro forma financial information from the outside auditors of
-----
the Company and/or CPLC referenced in Section 8.05(a) as may have been requested
by the Agents or the Required Banks, which comfort shall be satisfactory in form
and substance to the Agents and the Required Banks.
(b) On the Initial Borrowing Date, the Banks shall have received
consolidated financial projections for the Company and its Subsidiaries for the
six fiscal years ended after the Initial Borrowing Date (the "Projections"),
which Projections, and the supporting assumptions and explanations thereto,
shall be satisfactory in form and substance to the Agents and the Required
Banks.
5.13 Approvals, etc. On or prior to the Initial Borrowing Date, all
---------------
necessary governmental (domestic and foreign) and third party approvals in
connection with the Refinancing, the transactions contemplated by this Agreement
and otherwise referred to herein shall have been obtained and remain in effect,
and all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes materially
adverse conditions upon the making of the Loans and the transactions
contemplated by the Credit Documents. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the making of the Loans or the
transactions contemplated by the Credit Documents.
5.14 Cash on Hand. On the Initial Borrowing Date (and without giving
------------
effect to any incurrence of Loans on such date), the Company shall have cash on
hand of at least $5,000,000.
5.15 Absence of Downgrade. From and after September 30, 1995, HFS
--------------------
shall have suffered no rating downgrade (or at any time be unrated) by S&P and
shall not have been placed on "credit watch" with negative implications by S&P.
5.16 HFS Subordination Agreement. On the Initial Borrowing Date,
---------------------------
HFS, the Company and the Administrative Agent shall have duly authorized,
executed and delivered the HFS Subordination Agreement in the form of Exhibit I
(the "HFS Subordination Agreement"), pursuant to which HFS shall have agreed,
among other things, (i) notwithstanding anything to the contrary contained in
any HFS Agreement or otherwise, until the occurrence of the Bank Termination
Date, HFS will not terminate the Corporate Services Agreement for any reason
whatsoever without the prior written consent of the Required Banks, (ii)
notwithstanding anything to the contrary contained in any HFS Agreement or
otherwise, until the occurrence of the Bank Termination Date, fees owing
pursuant to the various HFS Agreements shall be payable only in accordance with
the requirements of Sections 10.03 and 10.06, (iii) to the extent that any fees
or amounts are owing to HFS or any of its Subsidiaries pursuant to any HFS
Agreement or otherwise as a result of the activities, operations or revenues of
any non-Wholly-Owned Subsidiary, Unrestricted Subsidiary or Joint Venture of the
Company, then neither the Company nor any of its Wholly-Owned Subsidiaries shall
have any liability to HFS or any of its Subsidiaries in respect of the amounts
so owed, and HFS or its respective Subsidiary shall have a claim for the
respective amounts owed to it only against the respective non-Wholly-Owned
Subsidiary, Unrestricted Subsidiary or Joint Venture, as the case may be,
provided that, notwithstanding the foregoing, the Company may be liable for its
--------
Allocable Share of any such fees or amounts of only a non-Wholly-Owned
Subsidiary or Joint Venture (but not of an Unrestricted Subsidiary) (as
determined for the respective non-Wholly-Owned Subsidiary or Joint Venture),
(iv) HFS shall agree that all amounts payable to it
23
by the Company and its Subsidiaries (except the amounts expressly provided
pursuant to Sections 10.06(iii), (v), (x)(a) and (xi)) shall be subordinated to
the payment in full of the Obligations on the terms set forth in the HFS
Subordination Agreement and (v) HFS shall agree, and shall agree to cause its
Subsidiaries, not to accept any Restricted Payment which is not permitted to be
paid pursuant to the provisions of this Agreement and, if any amount is received
by it which constitutes a Restricted Payment in excess of the amounts permitted
under this Agreement (including as may occur pursuant to Section 10.06(vii)),
then promptly after HFS has actual knowledge of its receipt of such excess
payment (or promptly after it receives notice from any Bank thereof), HFS shall
reimburse the Company in cash for the amount by which the payments made to HFS
and its Subsidiaries exceed the respective amounts permitted to be paid in
accordance with the requirements of this Agreement.
5.17 Additional Equity. On or prior to the Initial Borrowing Date,
-----------------
the Company shall have received at least $57,000,000 in gross proceeds from the
issuance of additional common stock of the Company to Chartwell and FNSL
pursuant to the Chartwell Stock Purchase Agreement, and the terms thereof shall
be satisfactory to the Required Banks.
5.18 Additional Financial Statements. On or prior to the Initial
-------------------------------
Borrowing Date, the Company shall have delivered to the Agents for each Material
Joint Venture (a) a profit and loss statement for the portion of its current
fiscal year ending on or about July 31, 1996 and (b) its federal income tax
returns for its tax year most recently ended.
SECTION 6. Conditions Precedent to Extensions of Credit on the
---------------------------------------------------
Canadian Borrowing Date. The obligation of each Bank to make its Loans, and the
-----------------------
obligation of the Issuing Bank to issue Letters of Credit, on the Canadian
Borrowing Date, is subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions (which shall occur on or before December 31, 1996):
1.061 Consummation of the Canadian Acquisition. On or prior to the
----------------------------------------
Canadian Borrowing Date, there shall have been delivered to the Banks true and
correct copies of all Canadian Acquisition Documents, and all terms and
provisions of such Canadian Acquisition Documents shall be in form and substance
satisfactory to the Agents and the Required Banks and shall not be amended in
any material respect without the consent of the Required Banks. The Canadian
Acquisition, including all of the terms and conditions thereof, shall have been
duly authorized by the board of directors and (if required by applicable law)
the shareholders of the Canadian Borrower, and all Canadian Acquisition
Documents shall have been duly executed and delivered by the parties thereto and
shall be in full force and effect. The representations and warranties set forth
in the Canadian Acquisition Documents shall be true and correct in all material
respects as if made on and as of the Canadian Borrowing Date. Each of the
conditions precedent to the Canadian Borrower's obligations to consummate the
Canadian Acquisition as set forth in the Canadian Acquisition Documents shall
have been satisfied to the satisfaction of the Agents and the Required Banks or
waived with the consent of the Administrative Agent and the Required Banks and
the Canadian Acquisition shall have been consummated in accordance with all
applicable law and the respective Canadian Acquisition Documents (without giving
effect to any amendment or modification thereof or waiver with respect thereto
unless consented to by the Agents or the Required Banks). The consideration
(exclusive of fees) paid in the Canadian Acquisition shall not exceed C$
98,000,000.
1.062 Officer's Certificate. On the Canadian Borrowing Date, the
---------------------
Administrative Agent shall have received a certificate, dated the Canadian
Borrowing Date and signed on behalf of the Company by an Authorized Officer,
stating all of the conditions of 6.01, 7.01, 7.02 and 7.03 have been satisfied
on such date.
1.063 Adverse Change. On the Canadian Borrowing Date, since December
--------------
31, 1995 nothing shall have occurred (and the Banks shall not have become aware
of any facts, conditions or other information not previously known) which the
Agents or the Required Banks shall reasonably determine has had or could
reasonably expected to have a material adverse effect (i) on the Transaction,
(ii) on the rights or remedies of the Agents or the Banks, or on the ability of
any Credit Party to perform their respective obligations to the Agents and the
Banks, under the Credit Documents or (iii) on the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries taken
as a whole.
24
1.064 Litigation. On the Initial Borrowing Date, no litigation by any
----------
entity (private or governmental) shall be pending or, to the knowledge of any of
the Credit Parties, threatened with respect to (i) the Canadian Acquisition, the
making of the Loans or the Credit Documents or any documentation executed in
connection therewith or the transactions contemplated thereby except as set
forth on Schedule XI or (ii) which the Agents or the Required Banks shall
reasonably determine could have a materially adverse effect on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
1.065 Environmental Assessments. On or prior to the Canadian
-------------------------
Borrowing Date, there shall have been delivered to the Administrative Agent the
Phase I environmental assessments from environmental consultants satisfactory to
the Agents and in form, scope and substance reasonably satisfactory to the
Agents and the Required Banks.
1.066 Approvals, etc. On or prior to the Canadian Borrowing Date, all
---------
necessary governmental (domestic and foreign) and third party approvals in
connection with the Canadian Acquisition (excluding such immaterial approvals
which may not have been obtained in connection with the Canadian Acquisition),
shall have been obtained and remain in effect, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse conditions
upon the consummation of the Canadian Acquisition. Additionally, there shall not
exist any judgment, order, injunction or other restraint issued or filed or a
hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the Canadian
Acquisition.
1.067 Security Agreement. On the Canadian Borrowing Date, Chartwell
------------------
Lodging Inc. shall have duly authorized, executed and delivered a Security
Agreement substantially in the form of Exhibit O (as modified, supplemented or
amended from time to time in accordance with the terms thereof and hereof and
together with the security agreements required under Section 9.14, a "Security
Agreement" and collectively, the "Security Agreements") covering all of such
Credit Party's present and future interest in an Amended and Restated Management
Services and Franchise Development Agreement among Chartwell Hotels, Inc., Royco
Hotels & Resorts Ltd. and the Company, in each case together with:
(v) a legal opinion, from counsel and in form satisfactory to the
Agents, with respect to the execution, delivery and performance by such
Credit Party of the Security Agreement, accompanied by evidence as to the
signature of such Credit Party and its authority to execute, delivery and
perform the Security Agreement;
(w) executed copies of Financing Statement (Form UCC-1) in
appropriate form for filing under the UCC of each jurisdiction as may be
necessary to perfect the security interests purported to be created by the
Security Agreement;
(x) certified copies of Requests for Information or Copies (Form UCC-
11), or equivalent reports, each of a recent date listing all effective
financing statements that name such Credit Party as debtor and that are
filed in the jurisdictions referred to in clause (w), together with copies
of such financing statements (none of which shall cover the Collateral
except (i) those with respect to which appropriate termination statements
executed by the secured lender thereunder have been delivered to the
Administrative Agent and (ii) to the extent evidencing Permitted Liens);
(y) evidence of the completion of, or arrangements to complete, all
other recordings and filings of, or with respect to, the Security Agreement
as may be necessary or, in the opinion of the Collateral Agent, desirable
to perfect the security interests intended to be created by the Security
Agreement; and
(z) evidence that all other actions reasonably necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by each Security
Agreement have been, or are in the process of being, taken.
25
SECTION 7. Conditions Precedent to All Credit Events. The
-----------------------------------------
obligation of each Bank, to make Loans (including Loans made on the Initial
Borrowing Date and the Canadian Borrowing Date), and the obligation of the
Issuing Bank to issue any Letter of Credit, is subject, at the time of each such
Credit Event (except as hereinafter indicated), to the satisfaction of the
following conditions:
1.071 No Default; Representations and Warranties. At the time of
------------------------------------------
each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
1.072 Adverse Change, etc. Nothing shall have occurred (and the Banks
-------------------
shall have become aware of no facts or conditions not previously known) which
could reasonably be expected to have a material adverse effect on (x) the rights
or remedies of the Banks or the Agents under the Credit Documents, (y) on the
ability of the Company or any other Credit Party to perform its obligations to
the Banks under the Credit Documents or (z) on the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries taken
as a whole from December 31, 1995 or from the pro forma financial statements
referred to in Section 8.05.
1.073 Litigation. At the time of each such Credit Event and also
----------
after giving effect thereto, no litigation by any entity (private or
governmental) shall be pending or threatened with respect to this Agreement or
any other Credit Document or the transactions contemplated hereby or thereby or
which could reasonably be expected to have a materially adverse effect on the
business, operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
1.074 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
---------------------------------------------
making of each Loan, the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03(a) or, in the case of a
Swingline Loan, the notice required by Section 1.03(b).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the Issuing Bank shall have received a Letter of Credit
Request meeting the requirements of Section 2.03(a).
1.075 Certain Requirements With Respect to Loans Incurred to Effect
-------------------------------------------------------------
Permitted Hotel Acquisitions. Prior to the making of any Loan the proceeds of
----------------------------
which are to be used to effect a Permitted Hotel Acquisition in which the total
consideration exceeds $2,000,000, the Company shall have satisfied the relevant
requirements of Section 10.02(ix) or 10.05(viii), as the case may be.
The occurrence of the Initial Borrowing Date and the acceptance of the
proceeds or benefits of each Credit Event shall constitute a representation and
warranty by the Borrowers to each of the Administrative Agent and each of the
Banks that all the conditions specified in Section 5, 6 and in this Section 7
and applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Sections 5 and 6 and in this Section 7, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account of
each of the Banks and, except for the Notes, in sufficient counterparts for each
of the Banks and shall be in form and substance reasonably satisfactory to the
Banks.
SECTION 8. Representations and Warranties. In order to induce the
------------------------------
Banks to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, the Borrowers make the
following representations, warranties and agreements, in each case after giving
effect to the Canadian Acquisition and the Recapitalization to be consummated on
or before the Canadian Borrowing Date, all of which shall survive the execution
and delivery of this Agreement and the Notes and the making of the Loans and
issuance of the Letters of Credit, with the occurrence of each Credit Event
being deemed to constitute a representation and warranty that the matters
specified in this Section 8 are true and correct on and as of the date of
26
such Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date):
1.081 Corporate and Partnership Status. Each of the Company and each
--------------------------------
of its Subsidiaries (i) is a duly organized and validly existing corporation or
partnership, as the case may be, in good standing (if applicable) under the laws
of the jurisdiction of its organization, (ii) has the corporate or partnership
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing (if
applicable) in each jurisdiction where the conduct of its business requires such
qualifications except for failures to be so qualified which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
1.082 Corporate or Partnership Power and Authority. Each Credit Party
--------------------------------------------
has the corporate or partnership power and authority to execute, deliver and
perform the terms and provisions of each of the Documents to which it is a party
and has taken all necessary corporate or partnership action to authorize the
execution, delivery and performance by it of each of such Documents. Each Credit
Party has duly executed and delivered each of the Documents to which it is a
party, and each of such Documents constitutes the legal, valid and binding
obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
1.083 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene in any material
respect any provision of any applicable law, statute, rule or regulation or any
applicable order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the properties
or assets of any Credit Party or any of its Subsidiaries pursuant to the terms
of any indenture, mortgage, deed of trust, credit agreement or loan agreement,
or any other material agreement, contract or instrument, to which any Credit
Party or any of its Subsidiaries is a party or by which it or any of its
property or assets is bound or to which it may be subject (excluding, in the
case of the Canadian Acquisition Documents and the Recapitalization Documents,
from the foregoing clauses (i) and (ii) such immaterial violations, which in no
event shall violate the provisions of this Agreement or otherwise be reasonably
expected to have a material adverse effect on (x) the Transaction, (y) the
rights or remedies of the Agents or the Banks under the Credit Documents, or on
the ability of any Credit Party to perform its obligations to the Agents and the
Banks under the Credit Documents or (z) on the business, operations, properly,
assets, nature of assets, liabilities or condition (financial or otherwise) or
prospects of the Company or the Company and its Subsidiaries taken as a whole)
or (iii) will violate any provision of the certificate of incorporation or by-
laws (or similar organizational documents) of any Credit Party or any of its
Subsidiaries.
1.084 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the Canadian Acquisition, (ii) the Recapitalization, (iii) the
execution, delivery and performance of any Credit Document or (iv) the legality,
validity, binding effect or enforceability of any such Credit Document.
1.085 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections, etc. (a)(i) The audited consolidated balance sheet of
------------------------------
the Company for the fiscal year ended in December 1995 and the related
consolidated statements of income and retained earnings and cash flows of the
Company for the fiscal year ended as of said date, which statements have been
audited by Deloitte & Touche LLP or its predecessor in interest, who delivered
an unqualified opinion with respect thereto and copies of which have heretofore
been delivered to each Bank, present fairly the consolidated financial position
of the respective entities at the dates of said statements and
27
such Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date):
1.081 Corporate and Partnership Status. Each of the Company and each
--------------------------------
of its Subsidiaries (i) is a duly organized and validly existing corporation or
partnership, as the case may be, in good standing (if applicable) under the laws
of the jurisdiction of its organization, (ii) has the corporate or partnership
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing (if
applicable) in each jurisdiction where the conduct of its business requires such
qualifications except for failures to be so qualified which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
1.082 Corporate or Partnership Power and Authority. Each Credit Party
--------------------------------------------
has the corporate or partnership power and authority to execute, deliver and
perform the terms and provisions of each of the Documents to which it is a party
and has taken all necessary corporate or partnership action to authorize the
execution, delivery and performance by it of each of such Documents. Each Credit
Party has duly executed and delivered each of the Documents to which it is a
party, and each of such Documents constitutes the legal, valid and binding
obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
1.083 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene in any material
respect any provision of any applicable law, statute, rule or regulation or any
applicable order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the properties
or assets of any Credit Party or any of its Subsidiaries pursuant to the terms
of any indenture, mortgage, deed of trust, credit agreement or loan agreement,
or any other material agreement, contract or instrument, to which any Credit
Party or any of its Subsidiaries is a party or by which it or any of its
property or assets is bound or to which it may be subject (excluding, in the
case of the Canadian Acquisition Documents and the Recapitalization Documents,
from the foregoing clauses (i) and (ii) such immaterial violations, which in no
event shall violate the provisions of this Agreement or otherwise be reasonably
expected to have a material adverse effect on (x) the Transaction, (y) the
rights or remedies of the Agents or the Banks under the Credit Documents, or on
the ability of any Credit Party to perform its obligations to the Agents and the
Banks under the Credit Documents or (z) on the business, operations, properly,
assets, nature of assets, liabilities or condition (financial or otherwise) or
prospects of the Company or the Company and its Subsidiaries taken as a whole)
or (iii) will violate any provision of the certificate of incorporation or by-
laws (or similar organizational documents) of any Credit Party or any of its
Subsidiaries.
1.084 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the Canadian Acquisition, (ii) the Recapitalization, (iii) the
execution, delivery and performance of any Credit Document or (iv) the legality,
validity, binding effect or enforceability of any such Credit Document.
1.085 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections, etc. (a)(i) The audited consolidated balance sheet of
------------------------------
the Company for the fiscal year ended in December 1995 and the related
consolidated statements of income and retained earnings and cash flows of the
Company for the fiscal year ended as of said date, which statements have been
audited by Deloitte & Touche LLP or its predecessor in interest, who delivered
an unqualified opinion with respect thereto and copies of which have heretofore
been delivered to each Bank, present fairly the consolidated financial position
of the respective entities at the dates of said statements and
27
the results of operations for the periods covered thereby, (iii) the audited
consolidated balance sheets of CPLP for the fiscal years ended September 30
1995, 1994 and 1993 and the related consolidated statements of income, changes
in equity and cash flows of CPLP for the fiscal years ended as of said dates,
which statements have been examined by Deloitte & Touche, Chartered Accountants,
or its predecessor in interest, who delivered an unqualified opinion with
respect thereto and copies of which have heretofore been delivered to each Bank,
present fairly the consolidated financial position of CPLP at the dates of said
statements and the results of operations for the p eriods covered thereby and
(iv) the unaudited consolidated balance sheet of CPLP for the fiscal quarter
ended in June 27, 1996 and the related consolidated statements of income,
changes in equity and cash flows of CPLP for the fiscal quarter ended as of said
date, copies of which have heretofore been delivered to each Bank, present
fairly the consolidated financial position of CPLP at the dates of said
statements and the results of operations for the periods covered thereby. All
financial statements referred to in the preceding sentence have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except (i) in the case of the audited financial statements,
to the extent provided in the notes to said financial statements, (ii) in the
case of the unaudited financial statements, for the absence of footnotes and for
the same being subject to normal year-end audit adjustments and (iii) in the
case of the financial statements of CPLP, such financial statements have been
prepared in accordance with Canadian generally accepted accounting principles
and practices consistently applied and the Company has provided to the Banks a
reconciliation of such financial statements of CPLP to generally accepted
accounting principles in the United States. The unaudited pro forma consolidated
--- -----
balance sheets and income statements of each of (i) the Company and its
Subsidiaries (including CPLP and its Subsidiaries) and (ii) the Canadian
Borrower and its subsidiaries prepared prior to the Initial Borrowing Date and
designated by the Company as the pro forma financial statements referred to in
--- -----
this Section 8.05(a), copies of which have been furnished to the Banks on or
prior to the Initial Borrowing Date, present fairly the consolidated pro forma
--- -----
financial position and results of operations of the entities covered thereby as
at March 31, 1996 (in the case of the pro forma consolidated balance sheets) or
--- -----
for the twelve month period ended on such date (in the case of the pro forma
--- -----
consolidated income statements), in each case based on the assumption that the
Canadian Acquisition, the Recapitalization, the related financing thereof and
the other transactions contemplated pursuant to this Agreement had been
consummated on March 31, 1996 (in the case of the pro forma consolidated balance
--- -----
sheets) or March 31, 1996 (in the case of the pro forma consolidated income
--- -----
statements). The unaudited pro forma consolidated financial statements referred
--- -----
to in the preceding sentence have been prepared on a basis consistent with the
financial statements of CPLP referred to in the first sentence of this Section
8.05(a), and have been prepared in a manner consistent with the requirements of
Regulation S-X of the SEC which are applicable to pro forma financial
--- -----
information prepared in accordance with the requirements thereof but shall be
subject to audit adjustments which shall not materially change the information
set forth in such unaudited pro forma financial statements. Since December 31,
--- -----
1995 (but after giving effect to the Canadian Acquisition, the Recapitalization
and the financing of the Canadian Acquisition as if same had occurred prior
thereto), there has been no material adverse change in the business, operations,
property, assets. nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries taken
as a whole.
(b) On and as of each of the Initial Borrowing Date and the Canadian
Borrowing Date, on a pro forma basis after giving effect to the Canadian
Acquisition, the Recapitalization and all other transactions contemplated by the
Documents and to all Indebtedness (including the Loans and Letters of Credit)
being incurred or assumed and Liens created by each Credit Party in connection
therewith, (x) the sum of the assets, at a fair valuation, of the Company and
its Subsidiaries (taken as a whole) and each Borrower (on a stand-alone basis)
will exceed their respective debts, (y) the Company and its Subsidiaries (taken
as a whole) and each Borrower (on a stand-alone basis) have not incurred and do
not intend to incur, and do not believe that they will incur, debts beyond their
ability to pay such debts as such debts mature and (z) the Company and its
Subsidiaries (taken as a whole) and each Borrower (on a stand-alone basis) have
sufficient capital with which to conduct its business. For purposes of this
Section 8.05(b) "debt" means any liability on a claim, and "claim" means (i)
right to payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (ii) right to an equitable remedy for
breach of performance if
28
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 8.05(a), there were as of the Initial Borrowing Date and the
Canadian Borrowing Date no liabilities or obligations with respect to the
Company or any of its Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, would be material to the Company or to the Company
and its Subsidiaries taken as a whole. As of the Initial Borrowing Date and the
Canadian Borrowing Date, the Company knows of no basis for the assertion against
it of any liability or obligation of any nature that is not fully disclosed in
the financial statements delivered pursuant to Section 8.05(a) which, either
individually or in the aggregate, could reasonably be expected to be material to
the Company or the Company and its Subsidiaries taken as a whole.
(d) On and as of the Initial Borrowing Date, the Projections, which
include the projected results of the Canadian Acquired Assets and which have
been delivered to the Agents and the Banks on or prior to the Initial Borrowing
Date, have been prepared on a basis consistent with the pro forma financial
statements referred to in Section 8.05(a), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Borrower to be misleading or which fail to take into
account material information regarding the matters reported therein. On the
Initial Borrowing Date, the Borrower believes that the Projections were
reasonable and attainable (it being understood that the Borrower makes no
representation or warranty that the results projected in the Projections will
actually be attained).
1.086 Litigation. There are no actions, suits or proceedings pending
----------
or, to the best knowledge of either Borrower, threatened (i) with respect to the
Transaction or any Document except as set forth on Schedule XI or (ii) that
could reasonably be expected to materially and adversely affect the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
1.087 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) furnished by or on behalf of the Company or any of its Subsidiaries in
writing to any Agent or any Bank (including, without limitation, all information
contained in the Documents, but excluding the Projections and assumptions
contained therein, which are covered pursuant to preceding Section 8.05(d)) for
purposes of or in connection with this Agreement, the other Documents or any
transaction contemplated herein or therein is, and all other factual information
(taken as a whole) hereafter furnished by or on behalf of the Company or any of
its Subsidiaries in writing to any Agent or any Bank will be, true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. The projections
(including the Projections, which include the projected results of the Canadian
Acquired Assets) contained in such materials are based on good faith estimates
and assumptions believed by the Company to be reasonable at the time made, it
being recognized by the Agents and the Banks that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered thereby may differ from the projected results.
1.088 Use of Proceeds; Margin Regulations. (a) The proceeds of the
-----------------------------------
Revolving C$ Loans shall be used by the Canadian Borrower on the Canadian
Borrowing Date (i) to finance the purchase price of the Canadian Acquisition and
(ii) to pay fees and expenses related to the Canadian Acquisition and the
financing therefor. The proceeds of all other Loans shall be used by the
Company for the Company's and its Subsidiaries' and Joint Ventures' general
corporate and partnership purposes, including to finance the working capital
needs of the Company and its Subsidiaries and Joint Ventures and to finance
Permitted Hotel Acquisitions and to pay the fees and expenses in connection
therewith (but shall not be used to pay any portion of the purchase price of the
Canadian Acquisition, the fees and expenses related thereto or to effect the
Recapitalization).
(b) No part of any Credit Event (or the proceeds thereof) will be used
to purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or
29
be inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
1.089 Tax Returns and Payments. (a) The Company and its Subsidiaries
------------------------
have timely filed or caused to be timely filed, on the due dates thereof or
within applicable grace periods, with the appropriate taxing authority, all
Federal, state and other material returns, statements, forms and reports for
taxes (the "Returns") required to be filed by or with respect to the income,
properties or operations of the Company and/or its Subsidiaries and Material
Joint Ventures, as the case may be. The Returns accurately reflect in all
material respects all liability for taxes of the Company and its Subsidiaries
and Material Joint Ventures for the periods covered thereby. Each of the
Company and each of its Subsidiaries and Material Joint Ventures has paid all
material taxes payable by them other than taxes which are not delinquent, and
other than those contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting principles.
There is no material action, suit, proceeding, investigation, audit, or claim
now pending or, to the best knowledge of the Company, threatened by any
authority regarding any taxes relating to the Company or any of its Subsidiaries
or Material Joint Ventures. As of the Initial Borrowing Date, neither the
Company nor any of its Subsidiaries has entered into an agreement or waiver or
been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Company or any
its Subsidiaries.
(b) As of the Initial Borrowing Date, the Company has, subject to
certain limitations and restrictions pursuant to the Code, available net
operating and capital loss carryovers within the meaning of Section 172(b) of
the Code in the amount of at least $15,000,000, which net operating and capital
loss carryovers expire beginning in the year 2009 and shall be made available by
the Company to offset future income of the Company and its Subsidiaries.
8.10 Compliance with ERISA. (i) Each Plan is in substantial
---------------------
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency or has applied for an extension of any amortization period within the
meaning of Section 412 of the Code (other than where the failure to do so would
not result in a material liability to the Borrower or any Subsidiary); all
contributions required to be made with respect to a Plan and a Foreign Pension
Plan have been timely made; neither the Company nor any Subsidiary of the
Company nor any ERISA Affiliate has incurred any material liability to or on
account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code which has not been satisfied or expects to incur any material
liability (including any indirect, contingent, or secondary liability) under any
of the foregoing Sections with respect to any Plan; no proceedings have been
instituted to terminate or appoint a trustee to administer any Plan; no
condition exists which presents a material risk to the Company or any Subsidiary
of the Company or any ERISA Affiliate of incurring a liability to or on account
of a Plan pursuant to the foregoing provisions of ERISA and the Code; using
actuarial assumptions and computation methods consistent with Part 1 of subtitle
E of Title IV of ERISA, the annual aggregate liabilities of the Company and its
Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans
(as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $50,000; no lien imposed under the Code or ERISA on the assets of the
Company or any Subsidiary of the Company or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and the Company and its Subsidiaries may
cease contributions to or terminate any employee benefit plan maintained by any
of them without incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
Company nor any of its Subsidiaries has incurred any obligation in connection
with the termination of or withdrawal from any Foreign Pension Plan. The
present value of the accrued benefit liabilities (whether or not vested) under
each Foreign Pension Plan, determined as of the end of the Company's most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
30
8.11 The Security Documents. (a) The security interests created in
----------------------
favor of the Collateral Agent, as Pledgee, for the benefit of the Secured
Creditors under the Pledge Agreement constitute first priority perfected
security interests in the Pledged Securities described in the Pledge Agreement,
subject to no security interests of any other Person. No filings or recordings
are required in order to perfect (or maintain the perfection or priority of) the
security interests created in the Pledged Securities and the proceeds thereof
under the Pledge Agreement.
(b) The Security Agreement creates, as security for the Obligations
purported to be secured thereby, a valid and enforceable perfected security
interest in and Lien on all of the Collateral subject thereto, superior to and
prior to the rights of all third Persons and subject to no other Liens (except
that the Collateral may be subject to the security interests evidenced by
Permitted Liens relating thereto thereunder), in favor of the Collateral Agent
for the benefit of the Banks. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with the Security Agreement which
shall have been made, or for which satisfactory arrangements have been made,
upon or prior to the execution and delivery thereof.
8.12 Representations and Warranties in Documents. All
-------------------------------------------
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of the Initial Borrowing Date as if such representations or
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations or warranties shall be
true and correct in all material respects as of such earlier date.
8.13 Properties. Each of the Company and each of its Subsidiaries
----------
and Material Joint Ventures has good and marketable title to all properties
owned respectively by it, including all property reflected in the consolidated
balance sheets referred to in Section 8.05(a) (except as sold or otherwise
disposed of since the date of such balance sheets in the ordinary course of
business), free and clear of all Liens, other than (i) as referred to in the
balance sheets or in the notes thereto or (ii) Permitted Liens. Schedule IV
contains a true and complete list of each parcel of Real Property owned or
leased by the Company and its Subsidiaries and Material Joint Ventures on the
Initial Borrowing Date, and the type of interest therein held by the Company or
such Subsidiary or Material Joint Venture. The Company and each of its
Subsidiaries and Material Joint Ventures have good and indefeasible title to all
fee-owned Real Properties and valid leasehold title to all Leaseholds.
8.14 Capitalization. On the Initial Borrowing Date, the Canadian
--------------
Borrowing Date and after giving effect to the Recapitalization and the other
transactions contemplated hereby, the authorized capital stock of the Company
shall consist of 100,000,000 shares of common stock, $0.01 par value per share
and 10,000,000 shares of preferred stock, $1.00 par value per share. As of the
Initial Borrowing Date and the Canadian Borrowing Date, 9,452,320 shares of
common stock of the Company are outstanding and no shares of preferred stock of
the Company are outstanding. All such outstanding shares of common stock have
been duly and validly issued, are fully paid and nonassessable and are free of
preemptive rights. As of the Initial Borrowing Date and the Canadian Borrowing
Date, except for options to purchase 1,635,000 shares of common stock of the
Company granted under its 1994 Stock Option Plan and the obligation of the
Company to issue up to 413,910 shares of its common stock under the Distribution
Agreement dated as of November 22, 1994, the Company does not have outstanding
any securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
8.15 Subsidiaries, Joint Ventures, Unrestricted Subsidiaries. After
-------------------------------------------------------
giving effect to the Canadian Acquisition, the Company will have no
Subsidiaries, Joint Ventures or Unrestricted Subsidiaries other than (i) those
Subsidiaries and Joint Ventures listed (and in each case identified as such) on
Schedule V and (ii) new Subsidiaries, Joint Ventures and Unrestricted
Subsidiaries created in compliance with Section 10.16. On the Initial Borrowing
Date and the Canadian Borrowing Date, the Company has no Unrestricted
Subsidiaries. Schedule V correctly sets forth, as of the Initial Borrowing Date
(i) the percentage ownership (direct or indirect) of the Company in each class
of capital stock or other equity interest of each of its Subsidiaries and Joint
Ventures and also identifies the direct owner thereof and (ii) each Material
Joint Venture.
31
8.16 Compliance with Statutes, etc. Each of the Company and each of
-----------------------------
its Subsidiaries and Joint Ventures is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its Sub
sidiaries taken as a whole.
8.17 Investment Company Act. Neither the Company nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
8.18 Public Utility Holding Company Act. Neither the Company nor any
----------------------------------
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
8.19 Environmental Matters. (a) Each of the Company and each of its
---------------------
Subsidiaries and Joint Ventures has complied with all applicable Environmental
Laws and the requirements of any permits issued under such Environmental Laws.
There are no pending or threatened Environmental Claims against the Company or
any of its Subsidiaries or Joint Ventures or any Real Property owned or operated
by the Company or any of its Subsidiaries or Joint Ventures. There are no
facts, circumstances, conditions or occurrences on any Real Property owned or
operated by the Company or any of its Subsidiaries or Joint Ventures or on any
property adjoining or in the vicinity of any such Real Property that could
reasonably be expected (i) to form the basis of an Environmental Claim against
the Company or any of its Subsidiaries or Joint Ventures or any such Real
Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by the Company or any of its Subsidiaries or Joint Ventures under any
applicable Environmental Law.
(b) To the best knowledge of the Company, Hazardous Materials have
not at any time been generated, used, treated or stored on, or transported to or
from, or Released on or from, any Real Property owned or operated by the Company
or any of its Subsidiaries or Joint Ventures except in compliance with all
applicable Environmental Laws and reasonably required in connection with the
operation, use and maintenance of any such Real Property by the Company's, such
Subsidiary's or such Joint Venture's business.
(c) Notwithstanding anything to the contrary in this Section 8.19,
the representations made in this Section 8.19 shall only be untrue if the
aggregate effect of all failures and noncompliance of the types described above
could reasonably be expected to have a material adverse effect on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
8.20 Labor Relations. Neither the Company nor any of its Subsidiaries
---------------
or Joint Ventures is engaged in any unfair labor practice that could reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries taken
as a whole. There is (i) no unfair labor practice complaint pending or, to the
best knowledge of the Company, threatened against the Company or any of its
Subsidiaries or Joint Ventures before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending or threatened against the Company or any of
its Subsidiaries or Joint Ventures, (ii) no strike, labor dispute, slowdown or
stoppage is pending or, to the best knowledge of the Company, threatened against
the Company or any of its Subsidiaries or Joint Ventures and (iii) to the best
knowledge of the Company, no union representation question exists with respect
to the employees of the Company or any of its Subsidiaries or Joint Ventures,
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a material
32
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Company or the Company
and its Subsidiaries taken as a whole.
8.21 Patents, Licenses, Franchises and Formulas. Each of the
------------------------------------------
Company and each of its Subsidiaries and Joint Ventures owns all material
patents, trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
reasonably necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to obtain which, as the
case may be, would result in a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Company or the Company and its Subsidiaries taken as a whole.
8.22 Indebtedness. Schedule VI sets forth a true and complete
------------
list of all Indebtedness of the Company and its Subsidiaries and Joint Ventures
as of the Initial Borrowing Date and the Canadian Borrowing Date (excluding the
Loans and any Indebtedness to be refinanced pursuant to the Refinancing, the
"Existing Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower and any other entity which
directly or indirectly guaranteed such debt.
8.23 Canadian Acquisition; Recapitalization. On the Canadian
--------------------------------------
Borrowing Date, the Canadian Acquisition and the Recapitalization shall have
been consummated in all respects in accordance with the terms of the respective
Documents and all applicable laws. At the time of consummation of the Canadian
Acquisition and the Recapitalization, all consents and approvals of, and filings
and registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to make or
consummate the Canadian Acquisition and the Recapitalization will have been
obtained, given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained), except where
the failure to so obtain, give, file or take would not have a material adverse
effect on the Canadian Acquisition or on the business, operations, property,
assets, nature of assets, liabilities, condition (financial or otherwise) or
prospects of the Company or the Company and its Subsidiaries taken as whole.
All applicable waiting periods with respect thereto have or, prior to the time
when required, will have, expired without, in all such cases, any action being
taken by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Canadian Acquisition or the Recapitalization.
Additionally, there does not exist any judgment, order or injunction prohibiting
or imposing material adverse conditions upon the Canadian Acquisition or the
Recapitalization, or the occurrence of any Credit Event or the performance by
any Credit Party of its obligations under the respective Documents. All actions
taken by the Credit Parties pursuant to or in furtherance of the Canadian
Acquisition and the Recapitalization have been taken in compliance with the
respective Documents and all applicable laws.
SECTION 9. Affirmative Covenants. The Company hereby covenants and agrees
---------------------
that on and after the Effective Date and until the Total Revolving Loan
Commitment and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other obligations incurred
hereunder and thereunder, are paid in full:
1.091 Information Covenants. The Company will furnish to the
---------------------
Administrative Agent (with sufficient copies for each of the Banks, and the
Administrative Agent will promptly forward to each of the Banks):
(a) Quarterly Reports. Within 60 days after the end of each
-----------------
fiscal quarter of the Company, the quarterly management reports prepared by (or
on behalf of) the Company or the respective Subsidiary or Joint Venture for each
Hotel Property, which quarterly management reports shall contain the revenues of
such Hotel Property for such fiscal quarter (including room revenues, food and
beverage revenues and other revenues), the average occupancy rate for such Hotel
Property for such fiscal quarter, the average daily room rate for such Hotel
Property for such fiscal quarter and such other information as may be reasonably
requested by the Administrative Agent for such Hotel Property to the extent
reasonably available.
(b) Quarterly Financial Statements. Within 60 days after the
------------------------------
close of the first three quarterly accounting periods in each fiscal year of the
Company (beginning with the fiscal quarter ending on or about September 30,
1996), (i) consolidated and consolidating balance sheets of the Company and its
consolidated
33
Subsidiaries and Unrestricted Subsidiaries as at the end of such quarterly
accounting period and the related consolidated statements of income and retained
earnings and statement of cash flows, in each case for such quar terly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period, in each case setting forth
comparative figures for the related periods in the prior fiscal year, all of
which shall be certified by an Authorized Financial Officer of the Company,
subject to normal year-end audit adjustments and (ii) management's discussion
and analysis of the important operational and financial developments during the
quarterly accounting period and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of the Company, the consolidated and consolidating balance
sheets of the Company and its consolidated Subsidiaries and Unrestricted
Subsidiaries, as at the end of such fiscal year and the related consolidated and
consolidating statements of income and retained earnings and of cash flows for
such fiscal year setting forth comparative figures for the preceding fiscal year
and certified, in the case of the consolidated statements, by Deloitte & Touche
LLP or such other independent certified public accountants of recognized
national standing acceptable to the Administrative Agent, together with a report
of such accounting firm stating that in the course of its regular audit of the
financial statements of the Company and its Subsidiaries and Unrestricted
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm obtained no knowledge of any Default or
Event of Default which has occurred and is continuing under any of Sections
10.03, 10.06 through 10.11, inclusive, and Section 11.12, or, if in the opinion
of such accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(d) Budgets. No later than 30 days (90 days in the case of the
-------
budgets delivered pursuant to clause (y) below) after the first day of each
fiscal year of the Company. budgets in form satisfactory to the Administrative
Agent (including, in any event, budgeted statements of cash flow and budgeted
debt and cash bal ances) for (x) such fiscal year prepared in detail and (y)
each of the five years immediately following such fiscal year prepared in
summary form, in each case, of the Company and its Subsidiaries and Joint
Ventures, accompanied by the statement of an Authorized Financial Officer of the
Company to the effect that the budget is a reasonable estimate for the period
covered thereby.
(e) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 9.01(a), (b) and (c), a
certificate of an Authorized Financial Officer of the Company to the effect that
no Default or Event of Default has occurred and is continuing or, if any Default
or Event of Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate, if delivered with the financial statements
required by Sections 9.01 (b) and (c), shall also (x) set forth the calculations
required to establish whether the Company was in compliance with the provisions
of Sections 3.03(d) (and shall show the calculation of the Reinvestment Amount
as of the last day of the period covered by such financial statements), and
10.03 through 10.11, inclusive, at the end of such fiscal quarter or year, as
the case may be, as well as the calculations required to establish compliance
with the provisions of Section 11.12 at the end of such fiscal quarter or year,
as the case may be, (y) set forth the amounts (and supporting calculations), as
at the last day of the respective fiscal quarter (but after giving effect to the
making of any Restricted Payments pursuant to Section 10.06(vii) in respect of
such fiscal quarter or fiscal year, as the case may be, and any Capital
Expenditure made pursuant to Section 10.07(c) in respect of such fiscal quarter
or fiscal year, as the case may be), of the Cumulative Retained Residual Excess
Cash Flow Amount, as well as a description of all Restricted Payments made
during (or with respect to) the respective fiscal quarter or fiscal year and
showing the calculations establishing compliance with the provisions of Section
10.03 and 10.06 and (z) if delivered with the financial statements required by
Section 10.01(c), set forth the amount of (and the calculations required to
establish Excess Cash Flow for the fiscal year covered by such financial
statements).
(f) Notice of Default or Litigation; HFS or Company Downgrade.
---------------------------------------------------------
Promptly, and in any event within three Business Days after an officer of the
Company or any of its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default, (ii)
any litigation or governmental investigation or proceeding pending or threatened
(x) against the Company or any of its Subsidiaries which could reasonably be
expected to materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Company or the Company and its Subsidiaries taken as a whole, (y) with respect
to any material Indebtedness of the Company or any of its Subsidiaries or Joint
Ventures or (z) with respect to any Document and (iii) any downgrading or
discontinuance of
34
rating of HFS or the Company by S&P or any other rating agency, and any
placement by S&P or any other rating agency of HFS or the Company on "credit
watch" or any similar action.
(g) Management Letters. Promptly after receipt thereof by the Company
------------------
or any of its Subsidiaries, a copy of any "management letter" received by the
Company or any of its Subsidiaries from its certified public accountants and the
management's responses thereto.
(h) Other Reports and Filings. Promptly, copies of all financial
-------------------------
information, proxy materials and other information and reports, if any, which
the Company or any of its Subsidiaries or Material Joint Ventures shall file
with the Securities and Exchange Commission or any successor thereto (the "SEC")
and copies of all notices and reports which the Company or any of its
Subsidiaries or Material Joint Ventures shall deliver to holders of its
Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within ten
---------------------
Business Days after, an officer of the Company or any of its Subsidiaries
obtains knowledge thereof, notice of one or more of the following environmental
matters:
(i) any pending or threatened material Environmental Claim
against the Company or any of its Subsidiaries or Joint Ventures or any
Real Property owned or operated by the Company or any of its Subsidiaries
or Joint Ventures;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by the Company or any of its Subsidiaries or
Joint Ventures that (a) results in non-compliance by the Company or any of
its Subsidiaries or Joint Ventures with any applicable Environmental Law or
(b) could reasonably be expected to form the basis of a material
Environmental Claim against the Company or any of its Subsidiaries or Joint
Ventures or any such Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by the Company or any of its Subsidiaries or Material Joint
Ventures that could reasonably be expected to cause such Real Property to
be subject to any restrictions on the ownership, occupancy, use or
transferability by the Company or any of its Subsidiaries or Material Joint
Ventures of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by the Company or any of its Subsidiaries or
Material Joint Ventures as required by any Environmental Law or any
governmental or other administrative agency; provided that in any event the
--------
Company shall deliver to each Bank all notices received by it or any of its
Subsidiaries from any government or governmental agency under, or pursuant
to, Environmental Law.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Company's or such Subsidiary's response or proposed response thereto. In
addition, the Company and any of its Subsidiaries and Material Joint Ventures
will provide the Administrative Agent with copies of all material communications
with any government or governmental agency relating to Environmental Laws, all
material communications with any Person relating to Environmental Claims, and
such detailed reports of any Environmental Claim as may be requested by the
Administrative Agent or any Bank.
(j) Annual Meetings with Banks. At the request of the Administrative
--------------------------
Agent, the Company shall within 120 days after the close of each fiscal year of
the Company, hold a meeting (at a mutually agreeable location and time) with all
of the Banks at which meeting shall be reviewed the financial results of the
previous fiscal year and the financial condition of the Company and the budgets
presented for the current fiscal year of the Company and its Subsidiaries and
Material Joint Ventures.
35
(k) Other Information. From time to time, such other information or
-----------------
documents (financial or otherwise) with respect to the Company or its
Subsidiaries or Joint Ventures as the Administrative Agent or any Bank (through
the Administrative Agent) may reasonably request.
1.092 Books, Records and Inspections. The Company will, and will
------------------------------
cause each of its Subsidiaries and Material Joint Ventures to, keep proper books
of record and account in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Company will, and will cause each of its Subsidiaries and Joint
Ventures to, permit officers and designated representatives of any Agent or the
Banks to visit and inspect, during regular business hours, upon reasonable
advance notice and under guidance of officers of the Company, such Subsidiary or
such Joint Venture, any of the properties of the Company or any of its
Subsidiaries or Joint Ventures, and to examine the books of account of the
Company and any of its Subsidiaries or Joint Ventures and discuss the affairs,
finances and accounts of the Company and any of its Subsidiaries or Joint
Ventures with, and be advised as to the same by, its and their respective
officers and independent accountants, all at such times and intervals and to
such extent as any Agent or the Banks may request.
1.093 Maintenance of Property, Insurance. (a) Schedule VII sets forth
----------------------------------
a true and complete listing of all insurance maintained by, or on behalf of, the
Company and its Subsidiaries and Material Joint Ventures as of the Initial
Borrowing Date and the Canadian Borrowing Date. The Company will, and will cause
each of its Subsidiaries and Material Joint Ventures to, (i) keep all property
necessary in its business in good working order and condition, (ii) maintain
insurance on all its property in at least such amounts and against at least such
risks as is consistent and in accordance with industry practice and (iii)
furnish to the Administrative Agent, upon written request, full information as
to the insurance carried. In addition to the requirements of the immediately
preceding sentence, the Company will at all times cause insurance of the types
described in Schedule VII to be maintained (with the same scope of coverage as
that described in Schedule VII) at levels which are at least as great as the
respective amount described opposite the respective type of insurance on
Schedule VII. Such insurance shall include physical damage insurance on all real
and personal property (whether now owned or hereafter acquired) on an all risk
basis, covering the full repair and replacement costs of all such property and
business interruption insurance for the actual loss sustained. All such
insurance shall be provided by insurers having an A.M. Best general
policyholders service rating of not less than B+III.
(b) If the Company or any of its Subsidiaries or Material Joint
Ventures shall fail to maintain all insurance in accordance with this Section
9.03, the Administrative Agent and/or the Collateral Agent shall have the right
(but shall be under no obligation), upon at least 10 days' notice to the
Company, to procure such insurance, the Company agrees to reimburse the
Administrative Agent or the Collateral Agent, as the case may be, for all costs
and expenses of procuring such insurance.
1.094 Corporate Franchises. The Company will, and will cause each of
--------------------
its Subsidiaries and Material Joint Ventures to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence and
its material rights, franchises, licenses and patents; provided, however, that
-------- -------
nothing in this Section 9.04 shall prevent (i) transactions permitted in
accordance with the applicable requirements of Sections 10.02 and 10.05 or (ii)
the withdrawal by the Company or any of its Subsidiaries or Material Joint
Ventures of its qualification as a foreign corporation in any jurisdiction where
such withdrawal could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
1.095 Compliance with Statutes, etc. The Company will, and will cause
------------------------------
each of its Subsidiaries and Joint Ventures to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliances as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Company or the Company
and its Subsidiaries taken as a whole.
1.096 Compliance with Environmental Laws. The Company will comply,
----------------------------------
and will cause each of its Subsidiaries and Joint Ventures to comply, in all
material respects with all Environmental Laws applicable to
36
the ownership or use of its Real Property now or hereafter owned or operated by
the Company or any of its Subsidiaries or Joint Ventures, will promptly pay or
cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws, in each case
except to the extent that such noncompliance, failure to pay or failure to keep
such Real Property free of Liens could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liability, condition (financial or otherwise) or
prospects of the Company or the Company and its Subsidiaries taken as a whole.
Neither the Company nor any of its Subsidiaries or Joint Ventures will generate,
use, treat, store, release or dispose of, or permit the generation, use,
treatment, storage, release or disposal of Hazardous Materials on any Real
Property now or hereafter owned or operated by the Company or any of its
Subsidiaries or Joint Ventures, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property except for Hazardous
Materials used or stored at any such Real Properties in compliance with all
applicable Environmental Laws and reasonably required in connection with the
operation, use and maintenance of any such Real Property, in each case except to
the extent that doing so could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, liability, condition (financial or otherwise) or prospects of
the Company or the Company and its Subsidiaries taken as a whole.
1.097 ERISA. As soon as possible and, in any event, within 15 days
-----
after the Company, any Subsidiary of the Company or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, the Company will
deliver to each of the Banks a certificate of an Authorized Financial Officer of
the Company setting forth details as to such occurrence and the action, if any,
that the Company, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by the Company, the Subsidiary, the ERISA Affiliate, the PBGC,
a Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred; that an accumulated funding deficiency has been
incurred or an application has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan and such action has not been dismissed
within 30 days; that a contribution required to be made to a Plan or Foreign
Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, that a Plan has an Unfunded Current Liability giving rise to a lien under
ERISA or the Code; that proceedings may be or have been instituted to terminate
or appoint a trustee to administer a Plan. that a proceeding has been instituted
against the Company, any Subsidiary of the Company or any ERISA Affiliate
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan
and such action has not been dismissed within 30 days; that the Company. any
Subsidiary of the Company or any ERISA Affiliate will incur any liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401
(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA; or that the Company, or any Subsidiary of the Company may incur any
material unfunded liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA). Within 10
days after a request by the Administrative Agent, the Company will deliver to
each of the Banks a complete copy of the annual report (Form 5500) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of any material notices received
by the Company, any Subsidiary of the Company or any ERISA Affiliate with
respect to any Plan or Foreign Pension Plan shall be delivered to the Banks no
later than 10 days after the date such notice has been received by the Company,
the Subsidiary or the ERISA Affiliate, as applicable.
1.098 End of Fiscal Years; Fiscal Quarters. The Company will cause
------------------------------------
(i) each of its, and each of its Subsidiaries' and Joint Ventures', fiscal years
to end on December 31, and (ii) each of its, and each of its Subsidiaries',
fiscal quarters to end on the last day of each March, June, September and
December.
1.099 Performance of Obligations. The Company will, and will cause
--------------------------
each of its Subsidiaries and Joint Ventures to, perform all of its obligations
under the terms of each mortgage, deed of trust, indenture, loan
37
agreement or credit agreement and each other material agreement, contract or
instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
9.10 Payment of Taxes. The Company will, and will cause each of its
----------------
Subsidiaries and Material Joint Ventures to, pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims for sums that have become due and payable
which, if unpaid, might become a lien or charge upon any properties of the
Company, any such Subsidiary or any such Material Joint Venture, provided that
--------
neither the Company nor any such Subsidiary or any Material Joint Venture shall
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with generally accepted
accounting principles.
9.11 Hotel Franchisors. The Company will take, and will cause each
-----------------
of its Subsidiaries and Joint Ventures to take, all action necessary so that (x)
except as otherwise provided in Section 11.11, each Hotel Property owned or
leased by the Company and its Subsidiaries and Joint Ventures are at all times
operated as a "Travelodge", "Thriftlodge" or another nationally recognized hotel
brand which the Chairman of the Board of Directors and the chief financial
officer of the Company (in a certificate signed by them delivered to the Agents)
have determined to be in the best interests of the Company and (y) except in
connection with the sale of any Hotel Property pursuant to the terms of this
Agreement or as otherwise provided in Section 11.11, no Franchise Agreement with
respect to a Hotel Property is terminated, provided that, notwithstanding the
--------
foregoing, at any date of determination Hotel Properties representing less than
10% in the aggregate for all such Hotel Properties of Total Hotel Revenues for
the Test Period then most recently ended and less than 10% of the consolidated
total assets of the Company and its Subsidiaries (after reduction for minority
interests) as calculated on the most recently ended fiscal quarter of the
Company shall not be required to be subject to this Section 9.11.
9.12 Joint Venture Distributions. To the extent any Joint Venture
---------------------------
receives any Net Cash Proceeds from any of the events specified in Sections
3.03(c) and (d) then, to the extent such Net Cash Proceeds would have to be
applied to reduce the Total Revolving Loan Commitment in accordance with the
requirements of Sections 3.03(c), and/or (d), as the case may be, if received by
a Wholly-Owned Subsidiary of the Company, the Company will use its best efforts
to cause such Joint Venture to distribute to the Company or a Wholly-Owned
Subsidiary thereof, concurrently with or as soon after the respective event as
is practicable, the Company's Allocable Share of such Net Cash Proceeds received
by such Joint Venture.
9.13 Corporate Separateness. The Company will take, and will cause
----------------------
each of its Subsidiaries, Joint Ventures and Unrestricted Subsidiaries to take,
all action as is necessary to keep the operations of the Company and its
Subsidiaries and Joint Ventures separate and apart from those of any
Unrestricted Subsidiaries including, without limitation, ensuring that all
customary formalities regarding their respective corporate existence including
holding regular board of directors' and shareholders' meetings and maintenance
of corporate offices and records, are followed. Neither the Company nor any of
its Subsidiaries or Joint Ventures shall make any payment to a creditor of any
Unrestricted Subsidiary in respect of any liability of any Unrestricted
Subsidiary. All financial statements provided to creditors shall clearly
evidence the corporate separateness of the Company and its Subsidiaries and
Joint Ventures from any Unrestricted Subsidiaries, and the Company and its
Subsidiaries and Joint Ventures shall maintain their own respective payroll (if
any) and separate books of account and bank accounts from Unrestricted
Subsidiaries. Each Unrestricted Subsidiary shall pay its respective
liabilities, including all administrative expenses, from its own separate
assets, and assets of the Company and its Subsidiaries and Joint Ventures shall
at all times be separately identified and segregated from the assets of
Unrestricted Subsidiaries. Finally, neither the Company nor any of its
Subsidiaries, Joint Ventures or Unrestricted Subsidiaries shall take any action,
or conduct its affairs in a manner which is likely to result in the corporate
existence of any Unrestricted Subsidiary being ignored, or in the assets and
liabilities of any Unrestricted Subsidiary being substantively consolidated with
those of the Company or any of its Subsidiaries or Joint Ventures in a
bankruptcy, reorganization or other insolvency proceeding.
38
9.14 Management Agreements. (a) Cause each Management Agreement
---------------------
entered into by the Company of any of its Subsidiaries or any Joint Venture
after the Initial Borrowing Date with a third-party (a "Third-Party Manager" to
be pledged as Collateral pursuant to the Security Agreement within 10 days of
the effectiveness of such Management Agreement, and the Company or the
applicable Subsidiary or Joint Venture, as the case may be, shall execute and
deliver to the Collateral Agent the Security Agreement, if it is not already a
party thereto, or an amendment to the Security Agreement, as the Collateral
Agent reasonably requests in order to grant to the Collateral Agent, for the
benefit of the Lenders, a security interest in such Management Agreement, and
take all actions reasonably requested by the Collateral Agent to grant to the
Collateral Agent, for the benefit of the Lenders, a security interest in such
Management Agreement, including without limitation, the filing of UCC financing
statements in such jurisdictions as may be required by the Security Agreement or
by law or as may be requested by the Administrative Agent; and deliver such
legal opinions and other documents, resolutions and evidence of authority as the
Agents may reasonably request; and (b) cause such Third-Party Manager to
subordinate its rights under such Management Agreements on terms satisfactory to
the Agents.
SECTION 10. Negative Covenants. The Company covenants and agrees
------------------
that on and after the Effective Date and until the Total Revolving Loan
Commitment and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
1.101 Liens. The Company will not, and will not permit any of its
-----
Subsidiaries or Material Joint Ventures to, create, incur, assume or suffer to
exist any Lien upon or with respect to any property or assets (real or personal,
tangible or intangible) of the Company or any of its Subsidiaries or Material
Joint Ventures, whether now owned or hereafter acquired, or sell any such
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable with recourse to the Company or any Subsidiary or Material Joint
Venture of the Company), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, provided that the provisions
--------
of this Section 10.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes, assessments
or governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles;
(ii) Liens in respect of property or assets of the Company or
any of its Subsidiaries or Material Joint Ventures imposed by law, which
were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers', warehousemen's,
materialmen's and mechanics' liens and other similar Liens arising in the
ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of the Company's, such Subsidiary's or
such Material Joint Venture's property or assets or materially impair the
use thereof in the operation of the business of the Company, such
Subsidiary or such Material Joint Venture or (y) which are being contested
in good faith by appropriate proceedings, which proceedings have the effect
of preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which
are listed, and the property subject thereto described, in Schedule VIII
(which Schedule VIII need not set forth the Liens created pursuant to the
Security Documents), but only to the respective date, if any, set forth in
such Schedule VIII for the removal and termination of any such Liens, but
no renewals or extensions of such Liens shall be permitted;
(iv) Liens created pursuant to the Credit Documents;
39
(v) leases or subleases granted by the Company or any of its
Subsidiaries or Material Joint Ventures to other Persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or Material Joint
Ventures;
(vi) Liens upon assets subject to Capitalized Lease Obligations
to the extent such Capitalized Lease Obligations are permitted by Section
10.04, provided that (x) such Liens only serve to secure the payment of
--------
Indebtedness arising under such Capitalized Lease Obligation and (y) the
Lien encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset of the Company or any Subsidiary or
Material Joint Venture of the Company;
(vii) Liens placed upon equipment or machinery used in the
ordinary course of business of the Company or any of its Subsidiaries or
Material Joint Ventures at the time of acquisition thereof by the Company
or any such Subsidiary or Material Joint Venture or within 60 days
thereafter to secure Indebtedness incurred to pay all or a portion of the
purchase price thereof, provided that (x) the aggregate outstanding
--------
principal amount of all Indebtedness secured by Liens permitted by this
clause (vii) shall not at any time exceed $4,000,000 and (y) in all events.
the Lien encumbering the equipment or machinery so acquired does not
encumber any other asset of the Company, such Subsidiary or such Material
Joint Venture;
(viii) easements, rights-of-way, restrictions, encroachments
and other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and which do not materially interfere
with the conduct of the business of the Company or any of its Subsidiaries
or Material Joint Ventures;
(ix) Liens arising from precautionary UCC financing statement
filings regarding operating leases entered into by the Company or any of
its Subsidiaries or Material Joint Ventures in the ordinary course of
business;
(x) statutory and common law landlords' liens under leases to
which the Company or any of its Subsidiaries or Material Joint Ventures is
a party;
(xi) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory
obligations, surety bonds, operating leases, bids, government contracts,
performance and return-of-money bonds and other similar obligations
incurred in the ordinary course of business (exclusive of obligations in
respect of the payment for borrowed money);
(xii) Liens arising out of judgments, awards or decrees (other
than any judgment, award or decree that is described in Section 11.10) in
respect of which the Company or any of its Subsidiaries or Material Joint
Ventures shall in good faith be prosecuting an appeal or proceedings for
review in respect of which there shall have been secured a subsisting stay
of execution pending such appeal or proceedings, provided that the Company,
--------
such Subsidiary or such Material Joint Venture shall have set aside on its
books adequate reserves, in accordance with GAAP, with respect to such
judgment or award;
(xiii) Liens on Real Property and other assets to finance the
purchase price thereof provided that (a) the obligations secured by such
--------
Liens are recourse only to such assets and the holder(s) of such
obligations have expressly waived recourse against the Company and its
Subsidiaries and the Joint Ventures except to such assets, (b) any Event of
Default under this Agreement shall not constitute a default under such
obligations and (c) the aggregate principal amount of such obligations does
not exceed $15,000,000;
(xiv) Liens on Hotel Properties described in clause (xi) of
Section 10.04 to secure the construction or renovation financing thereof;
40
(xv) Liens on Xxxxxxx Hotels securing Indebtedness of the
Company and its Subsidiaries permitted by Section 10.04(xiv) but only to
the extent such Liens are required in order to obtain such acquisition and
construction Indebtedness and do not secure any refinancing or other
Indebtedness; and
(xvi) Liens securing the Indebtedness described in Section
10.05(xiii).
1.102 Consolidation, Merger, Purchase or Sale of Assets, etc.
-------------------------------------------------------
The Company will not, and will not permit any of its Subsidiaries or Material
Joint Ventures to, wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or any
part of its property or assets, or enter into any sale leaseback transactions,
or purchase or otherwise acquire (in one or a series of related transactions)
any part of the property or assets (other than purchases or other acquisitions
of inventory, materials and equipment in the ordinary course of business) of any
Person, except that:
(i) Capital Expenditures (including payments in respect of
Capitalized Lease Obligations) by the Company and its Subsidiaries and
Material Joint Ventures shall be permitted to the extent not in violation
of Section 10.07:
(ii) the Company and each of its Subsidiaries and Material
Joint Ventures may in the ordinary course of business, sell, lease (as
lessor) or otherwise dispose of equipment and materials which, in the
reasonable opinion of such Person, are obsolete, uneconomic or no longer
useful in the conduct of such Person's business, provided that (x) except
--------
to the extent the respective equipment or materials are transferred in
like-kind exchanges and/or trade-in-value is received on purchases of like-
kind assets, at least 80% of the consideration therefor (taking the amount
of cash and the fair market value of any non-cash consideration or, if
greater, the principal amount of any non-cash consideration) shall be in
the form of cash, (y) the aggregate Net Cash Proceeds of all assets sold or
otherwise disposed of pursuant to this clause (ii) shall not exceed
$2,000,000 in any fiscal year of the Company and (z) the Net Cash Proceeds
from each Asset Sale pursuant to this clause (ii) are applied in accordance
with the requirements of Section 3.03(d);
(iii) Investments (including by loans and advances) may be
made to the extent permitted by Section 10.05;
(iv) the Company and each of its Subsidiaries and Material
Joint Ventures may lease (as lessee) real or personal property in the
ordinary course of business (so long as any such lease does not create a
Capitalized Lease Obligation unless permitted by clause (i) of this Section
10.02);
(v) the Company and each of its Subsidiaries and Material
Joint Ventures may make sales of inventory in the ordinary course of
business;
(vi) the Canadian Acquisition shall be permitted as
contemplated in the Canadian Acquisition Documents;
(vii) the Company and its Subsidiaries may sell any Specified
Existing Investment, so long as (i) each sale is in an arms' length
transaction and the Company or the respective Subsidiary receives at least
fair market value (as determined in good faith by the Board of Directors of
the Company or any authorized committee of such Board of Directors) and
(ii) the Net Cash Proceeds from each Asset Sale pursuant to this clause
(vii) are applied in accordance with the requirements of Section 3.03(d);
(viii) the Company and each of its Subsidiaries and Material
Joint Ventures may sell Hotel Properties (or the entire equity interests of
such Person in any Subsidiary or Joint Venture owning or leasing the
respective Hotel Properties), so long as (i) no Default or Event of Default
then exists or would result therefrom, (ii) each sale is in an arms' length
transaction and the Company or the respective Subsidiary or Material Joint
Venture receives at least fair market value (as determined in good faith by
the Board of Directors of the Company or any authorized committee of such
Board of Directors), (iii) the total
41
consideration received by the Company or such Subsidiary is at least 75% in
cash with respect to the sale of any wholly-owned Hotel Property of the
Company or a Wholly-Owned Subsidiary thereof (or with respect to the sale
of any Wholly-Owned Subsidiary of the Company) or with respect to the sale
of any Joint Venture (or any Hotel Property of such Joint Venture) set
forth on Schedule X, provided that, (x) in lieu of receiving cash in any
--------
sale of the entire equity interest in any Joint Venture existing on the
Initial Borrowing Date, the Company or the respective Subsidiary may
exchange the entire equity interest of such Joint Venture for equity
interests (not theretofore owned, directly or indirectly, by the Company)
of one or more other Joint Ventures existing on the Initial Borrowing Date
so long as the effect of any such exchange is to increase the Company's
direct or indirect, as the case may be, equity interests in the Joint
Venture or Joint Ventures so acquired and (y) with respect to the sale of
any Joint Venture (or any Hotel Property owned by such Joint Venture)
(other than with respect to the sale of any Joint Venture (or any Hotel
Property owned by such Joint Venture) listed on Schedule X) the aggregate
amount of all non-cash consideration held at any one time shall not exceed
$10,000,000 (taking the face amount of debt and the fair market value of
all other non-cash collateral, and determined without regard to any
writedowns or write-offs thereof), (iv) the aggregate Net Cash Proceeds of
all assets sold pursuant to this clause (viii) shall not exceed $25,000,000
in any fiscal year of the Company and (v) the Net Cash Proceeds from each
Asset Sale pursuant to this clause (viii) are applied in accordance with
the requirements of Section 3.03(d);
(ix) the Company and each of its Wholly-Owned Subsidiaries may
acquire Hotel Properties (including by purchasing 90% or more of the
capital stock or partnership interests of the Person that owns such Hotel
Properties) so long as (i) such Hotel Properties are at least 90% owned by
the Company or such Wholly-Owned Subsidiary, (ii) such Hotel Properties are
located in the United States, Canada, Mexico or Puerto Rico, provided that,
--------
notwithstanding the foregoing, at any date of determination Hotel
Properties representing less than 10% of Total Hotel Revenues for the Test
Period then most recently ended and less than 10% of the consolidated total
assets of the Company and its Subsidiaries (after reduction for minority
interests) as calculated on the most recently ended fiscal quarter of the
Company shall not be required to be subject to this clause (ii), (iii)
prior to the date of acquisition of any such Hotel Property, the Company
shall have delivered to each of the Banks a Phase I environmental
assessment on such Hotel Property from an environmental firm, certified to
and in form, scope and substance, reasonably satisfactory to the
Administrative Agent, (iv) with respect to the acquisition of any Hotel
Property subject to a Leasehold (and which will not be owned by the Company
or the respective Wholly-Owned Subsidiary in fee), such Hotel Property may
be acquired only if the respective Leasehold shall have a remaining term
(including a right of extension by the Company or such Wholly-Owned
Subsidiary) of at least 15 years, (v) at least 10 Business Days prior to
the consummation of any acquisition of any Hotel Property the Company shall
have delivered to each of the Banks the Information Package relating to
such Hotel Property, and in the case of any acquisition of any Hotel
Property or group of related Hotel Properties in which the total
consideration exceeds $15,000,000, the Required Banks shall have not
informed the Company in writing prior to the end of 15 Business Days after
the Bank's receipt of the respective Information Package that they do not
approve of such acquisition, (vi) except to the extent otherwise permitted
by Section 9.11, each Hotel Property shall be operated as a "Travelodge", a
"Thriftlodge" or another nationally recognized hotel brand which the
Chairman of the Board of Directors and the chief financial officer of the
Company (in a certificate signed by them delivered to the Agents) have
determined to be in the best interests of the Company and shall be subject
to a Franchise Agreement, a copy of which Franchise Agreement shall be
delivered to each of the Banks on or prior to the date of the consummation
of the acquisition of such Hotel Property, and (vii) in the case of any
acquisition of any Hotel Property or group of related Hotel Properties in
which the total consideration exceeds $3,000,000, (I) based on calculations
made by the Company on a Pro Forma Basis after giving effect to the
---------
respective acquisition, no Default or Event of Default will exist under, or
would have existed during the period of four consecutive fiscal quarters
last reported (or required to be reported pursuant to Section 9.01(b) or
(c), as the case may be) prior to the date of the respective acquisition
under, the financial covenants contained in Sections 10.08 through 10.11,
inclusive, (II) based on good faith projections prepared by the Company for
the period from the date of the consummation of the acquisition to the date
which is one year thereafter or based on the historical financial
statements (but after giving effect to all Scheduled Commitment Reductions
that will occur during the one year period after the date of the
consummation of the respective acquisition) delivered in the Information
Package for such Hotel Property or Hotel Properties calculated on a Pro
---
Forma Basis after giving effect to the respective
-----
42
acquisition, the level of financial performance measured by the covenants
set forth in Sections 10.08 through 10.11, inclusive, shall be better than
or equal to such level as would be required to provide that no Default or
Event of Default will exist under the financial covenants contained in such
Sections 10.08 through 10.11, inclusive, as compliance with such covenants
will be required through the date which is one year from the date of the
consummation of the respective acquisition, and (III) the Company shall
have delivered to the Administrative Agent an officer's certificate
executed by an Authorized Financial Officer of the Company, certifying to
the best of such officer's knowledge, compliance with the requirements of
this clause (vii) and containing the calculations (in reasonable detail)
required by this clause (vii);
(x) [INTENTIONALLY OMITTED];
(xi) the Company may make the Mexican Investment in accordance
with clause (xv) of Section 10.06; and
(xii) the Company and its Subsidiaries may sell the Gaming
Assets.
To the extent the Required Banks waive the provisions of this Section 10.02 with
respect to the sale of any Collateral, or any Collateral is sold or otherwise
disposed of as permitted by this Section 10.02, such Collateral shall be sold or
otherwise transferred or disposed of free and clear of the Liens created by the
Security Documents and the Administrative Agent and the Collateral Agent shall
be authorized to take any actions deemed appropriate in order to effect the
foregoing.
1.103 Restricted Payments. The Company will not, and will not
-------------------
permit any of its Subsidiaries or Material Joint Ventures to, authorize, declare
or pay any Restricted Payments, except:
(i) any Subsidiary or Material Joint Venture of the Company
may make Restricted Payments to the Company or any Wholly-Owned Subsidiary
of the Company;
(ii) any Subsidiary of the Company which is not a Wholly-Owned
Subsidiary of the Company or any Material Joint Venture of the Company may
make Restricted Payments so long as the Company and each Subsidiary of the
Company which has an ownership interest in such non-Wholly-Owned Subsidiary
or Material Joint Venture receives a portion of such Restricted Payment
which is at least as great as the percentage ownership interest of the
Company or such other Subsidiary of the Company in the respective
Subsidiary or Material Joint Venture which is making the Restricted
Payment;
(iii) after the execution and delivery of any HFS Subordinated
Note in accordance with the requirements of Section 10.04(vii), the Company
may make regularly scheduled payments of interest in respect thereof (at
the interest rate described in Section 10.04(vii)), so long as (x) no
Default or Event of Default shall exist at the time of the making of such
payment or immediately after giving effect thereto and (y) the respective
payment is permitted in accordance with the HFS Subordination Agreement;
(iv) the Company may make Restricted Payments as specifically
permitted by clauses (iii) through (xi) of Section 10.06;
(v) after the issuance of any Redeemable Capital Stock in
accordance with the requirements of Section 10.04(viii), the Company may
pay cash dividends to HFS in respect thereof at times that the Company
could have paid interest on any HFS Subordinated Note (i.e., such dividends
----
shall be permitted to be paid at the end of each successive three-month
Interest Period with respect thereto), so long as (x) no Default or Event
of Default shall exist at the time of the making of such payment or
immediately after giving effect thereto, (y) the respective payment is
permitted in accordance with the HFS Subordination Agreement and (z) the
amount of dividends paid in cash with respect to the HFS Redeemable Capital
Stock shall not exceed the amounts permitted to be paid pursuant to Section
10.04(viii)(y) (after giving effect to the proviso thereto);
(vi) [INTENTIONALLY OMITTED];
43
(vii) after the issuance of any Chartwell Preferred
Stock/Subordinated Debt, the Company may pay cash dividends or make cash
interest payments, as the case may be, to Chartwell in respect thereof, so
long as (x) no Default or Event of Default shall exist at the time of the
making of such payment or immediately after giving effect thereto, (y) the
aggregate amount of Restricted Payments made pursuant to this clause (vii)
does not exceed the Cumulative Unrestricted Subsidiary Dividend Amount as
in effect immediately prior to the making of such payment, and (z) the
terms of such Chartwell Preferred Stock/Subordinated Debt satisfy the
requirements of Section 10.04(ix); and
(viii) after the issuance of any Permitted Subordinated
Indebtedness, the Company may make regularly scheduled payments of interest
in respect thereof (at the stated non-default interest rate set forth in
such Permitted Subordinated Indebtedness), so long as (x) no Default or
Event of Default shall exist at the time of the making of such payment or
immediately after giving effect thereto, (y) the respective payment is
permitted in accordance with the subordination provisions of such Permitted
Subordinated Indebtedness and (z) such payments are made no more frequently
than semi-annually and are made only in respect of unpaid accrued interest.
1.104 Indebtedness. The Company will not, and will not permit
------------
any of its Subsidiaries or Material Joint Ventures to, contract, create, incur,
assume or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Existing Indebtedness to the extent the same is listed on
Schedule VI, but no refinancing or renewals thereof, provided that (a) the
--------
Bank of America Facility may be refinanced and (b) in no event shall the
aggregate outstanding principal amount of Indebtedness under the Bank of
America Facility exceed $15,000,000 at any one time;
(iii) (a) Indebtedness under Interest Rate Protection Agreements
entered into with respect to Indebtedness outstanding under the Agreement
and other Indebtedness (i.e., to provide protection against fluctuations in
floating interest rates with respect to a notional amount not to exceed, at
the time of the entering into of the respective Interest Rate Protection
Agreement, the aggregate principal amount of the underlying Indebtedness
outstanding); and (b) Indebtedness under Other Hedging Agreements entered
into with respect to foreign currency owned or projected to be owned by the
Company or any of its Subsidiaries or Material Joint Ventures (i.e., to
provide protection against fluctuations in currency exchange rates with
respect to a notional amount not to exceed, at the time of the entering
into of the respective Agreement, the amount of foreign currency owned or
projected to be owned by the Company or any of its Subsidiaries of Material
Joint Ventures); provided that no such transaction described in this
--------
paragraph (iii) is entered into for speculative purposes;
(iv) Indebtedness of the Company and its Subsidiaries and
Material Joint Ventures evidenced by Capitalized Lease Obligations entered
into after the Initial Borrowing Date, in each case so long as the
respective Capitalized Lease Obligation relates to an acquisition of assets
made after the Initial Borrowing Date in accordance with Section 10.07 and
the Liens arising as a result thereof are permitted pursuant to Section
10.01, and so long as the aggregate outstanding principal amount of
Capitalized Lease Obligations incurred on or after the date hereof at no
time exceeds $10,000,000;
(v) Indebtedness of the Company and its Subsidiaries and
Material Joint Ventures subject to Liens permitted under Section
10.01(vii), so long as the aggregate principal amount of Indebtedness
outstanding pursuant to this clause is limited as provided in said Section
10.01(vii);
(vi) intercompany Indebtedness among the Company and its
Subsidiaries and Material Joint Ventures to the extent permitted by Section
10.05;
(vii) unsecured subordinated Indebtedness of the Company
issued to HFS upon a downgrading of each of HFS' and the Company's long-
term senior unsecured debt credit rating by S&P triggering a mandatory
commitment reduction pursuant to Section 3.03(e) or (f) (the "HFS
Subordinated Indebtedness")
44
so long as (x) the aggregate outstanding principal amount of HFS
Subordinated Indebtedness does not exceed the aggregate cash proceeds
actually loaned by HFS to the Company to enable it to make mandatory
repayments of Loans pursuant to Section 4.02(a) as a result of a reduction
to the Total Revolving Loan Commitment pursuant to Sections 3.03(e) and/or
(f)), (y) the HFS Subordinated Indebtedness shall not be guaranteed and
shall be evidenced by a subordinated promissory note or notes (subject to
the limitation on the aggregate outstanding principal amount thereof
provided in preceding clause (x)) in the form of Exhibit J, which shall
mature not earlier than the date which occurs one year after the Final
Maturity Date and shall bear interest at a rate per annum not to exceed the
Eurodollar Rate (as determined for successive interest periods of 3 months)
plus the Applicable Margin as in effect from time to time (each an "HFS
Subordinated Note") and (z) 100% of the cash proceeds loaned to the Company
as evidenced by the HFS Subordinated Indebtedness shall be used for the
purposes described in preceding clause (x);
(viii) Redeemable Capital Stock of the Company issued to HFS
upon a downgrading of each of HFS' and the Company's long-term senior
unsecured debt credit rating by S&P triggering a mandatory reduction
pursuant to Section 3.03(e) or (f) (the "HFS Redeemable Capital Stock") so
long as (x) the aggregate amount thereof does not exceed the aggregate cash
proceeds invested by HFS in the Company by way of such Redeemable Capital
Stock investment to enable it to make mandatory repayments of Loans
pursuant to Section 4.02(a) as a result of the reduction to the Total
Revolving Loan Commitment pursuant to Sections 3.03(e) and/or (f)), (y) the
HFS Redeemable Capital Stock shall not be guaranteed and shall have no
required redemptions and no required offers to purchase same by the Company
or any of its Subsidiaries or Joint Ventures, whether through the lapse of
time, the occurrence of certain contingencies or otherwise, at any time
prior to the date which occurs one year after the Final Maturity Date and
such HFS Redeemable Capital Stock shall accrue dividends at a rate per
annum not to exceed the Eurodollar Rate (as determined for successive
interest periods of 3 months) plus the Applicable Margin as in effect from
time to time, provided that the amount of dividends permitted to be paid in
--------
cash on any HFS Redeemable Capital Stock issued pursuant to this clause
(viii) at the end of any such interest period shall not exceed an amount
equal to the dividends which would accrue on such HFS Redeemable Capital
Stock for such interest period at the rate described above multiplied by an
amount equal to 1 minus the then Current Consolidated Tax Rate of the
Company during such period, with any dividends which is not permitted to be
paid in cash for any interest period because of the immediately preceding
proviso to be deferred (with no additional dividends to accrue on such
deferred amounts) until after the Bank Termination Date, and (z) 100% of
the cash proceeds invested by the Company in return for the issuance of the
HFS Redeemable Capital Stock shall be used for the purposes described in
preceding clause (x);
(ix) Chartwell Preferred Stock/Subordinated Debt issued to
Chartwell so long as (u) the aggregate amount thereof does not exceed the
aggregate cash proceeds invested by Chartwell in the Company by way of a
Chartwell Preferred Stock investment (provided that, in any event, the
--------
aggregate amount of Chartwell Preferred Stock/Subordinated Debt shall not
exceed $50,000,000 less the aggregate principal amount of Permitted
Subordinated Indebtedness outstanding under clause (x) below), in each case
except to the extent such excess has resulted from the accrual of dividends
or interest thereon (as the case may be), (v) the Chartwell Preferred
Stock/Subordinated Debt shall be issued by the Company, shall not be
guaranteed and shall have no required redemptions or amortization and no
required offers to purchase same by the Company or any of its Subsidiaries
or Joint Ventures, whether through the lapse of time, the occurrence of
certain contingencies or otherwise, at any time prior to the date which
occurs one year after the Final Maturity Date, (w) the Chartwell Preferred
Stock/Subordinated Debt shall accrue dividends or interest, as the case may
be, at a rate per annum not to exceed 8.5%, (x) the Chartwell Preferred
Stock/Subordinated Debt shall not have any covenants restricting the
business or operations of the Company or any of its Subsidiaries or Joint
Ventures and shall expressly provide that any payments in respect thereof,
whether in respect of accrued dividends or interest, mandatory redemptions
or payments of principal, may only be made to the extent permitted by the
terms of this Agreement (including Sections 10.03, 10.04 and 10.06), as
same may be amended, supplemented, amended and restated, or refinanced from
time to time, and (z) Chartwell Subordinated Debt may be issued only upon
the conversion thereto of outstanding Chartwell Preferred Stock theretofore
issued in accordance with the requirements of this Agreement, and prior to
(and the Chartwell Preferred Stock shall provide that as a condition to)
the
45
conversion of the Chartwell Preferred Stock into Chartwell Subordinated
Debt, the prior written consent of the Required Banks is obtained;
(x) subordinated Indebtedness of the Company in a principal
amount not to exceed $50,000,000, less the aggregate amount of Chartwell
Preferred Stock/Subordinated Debt outstanding under clause (ix) above
(excluding Chartwell Preferred Stock/Subordinated Debt consisting of
accrual of dividends or interest thereon), provided, that (a) the
--------
subordination provisions contain the terms set forth in Exhibit N; (b) no
such Indebtedness shall mature (whether by scheduled payment or mandatory
prepayment) earlier than the date which occurs one year after the Final
Maturity Date; (c) payment of such Indebtedness may not be accelerated or
come due prior to the date which occurs one year after the Final Maturity
Date unless payment of the Loans has previously been accelerated in
accordance with Section 12; and (d)(i) based on calculations made by the
Company on a Pro Forma Basis after giving effect to the incurrence of such
--- -----
Indebtedness, no Default or Event of Default will exist under, or would
have existed during the period of four consecutive fiscal quarters last
reported (or required to be reported pursuant to Section 9.01(b) or (c), as
the case may be) prior to the date of the incurrence of such Indebtedness
under, the financial covenants contained in Sections 10.08 through 10.11,
inclusive, (ii) based on good faith projections prepared by the Company for
the period from the date of the incurrence of such Indebtedness to the date
which is one year thereafter (but after giving effect to all Scheduled
Commitment Reductions that will occur during the one year period after the
date of the incurrence of such Indebtedness calculated on a Pro Forma Basis
--- -----
after giving effect to the incurrence of such Indebtedness, the level of
financial performance measured by the covenants set forth in Sections 10.08
through 10.11, inclusive, shall be better than or equal to such level as
would be required to provide that no Default or Event of Default will exist
under the financial covenants contained in such Sections 10.08 through
10.11, inclusive, as compliance with such covenants will be required
through the date which is one year from the date of the incurrence of such
Indebtedness, and (iii) the Company shall have delivered to the
Administrative Agent an officer's certificate executed by an Authorized
Financial Officer of the Company, certifying to the best of such officer's
knowledge, compliance with the requirements of this clause (d) and
containing the calculations (in reasonable detail) required by this clause
(d);
(xi) Indebtedness consisting of guaranties by the Company of
obligations of its Subsidiaries and Material Joint Ventures incurred solely
to finance the construction or renovation of Hotel Properties, provided
--------
that the aggregate amount of the obligations guaranteed by the Company
pursuant to this clause (xi) shall not exceed $20,000,000 less the
aggregate amount paid by the Company pursuant to such guaranties, and
provided, further, that the aggregate principal amount of Indebtedness
-------- -------
incurred pursuant to this clause (xi) and clause (xiv) of this Section
10.04 shall not exceed $30,000,000;
(xii) Indebtedness of Material Joint Ventures permitted by
clause (xiv) of Section 10.05;
(xiii) non-recourse Indebtedness in an aggregate principal
amount not to exceed $15,000,000 as described in clause (xiii) of Section
10.01;
(xiv) Indebtedness of the Company in an aggregate principal
amount not to exceed $20,000,000 incurred to finance the acquisition and
construction of Xxxxxxx Hotels, provided that the aggregate principal
--------
amount of Indebtedness incurred pursuant to this clause (xiv) and clause
(xi) of this Section 10.04 shall not exceed $30,000,000; and
(xv) Indebtedness (from and after the execution of the Las
Vegas Lease described below) consisting of a guaranty by the Company of the
obligations of the tenant under the Las Vegas Lease with respect to the
Hotel Property and adjoining real property located at Las Vegas South Strip
(in the vicinity of, and including, 0000 Xxx Xxxxx Xxxxxxxxx Xxxxx), Xxx
Xxxxx, Xxxxxx (the "Las Vegas Lease") which leasehold interest is to be
acquired by Chartwell Lodging Inc. (formerly NL Hotels, Inc.) pursuant to a
right of first refusal pursuant to Article XXII of the existing Travelodge
lease for 0000 Xxx Xxxxx Xxxxxxxxx Xxxxx, provided that the Company may not
--------
guarantee payment of more than $2,000,000 per year under the Las Vegas
Lease.
46
Notwithstanding anything to the contrary contained in (A) clauses (vii) and
(viii) above, the sum of the aggregate principal amount of HFS Subordinated
Indebtedness incurred pursuant to such clause (vii) and the aggregate
liquidation preference of all HFS Redeemable Capital Stock issued pursuant to
such clause (viii) shall in no event exceed the aggregate repayments theretofore
made pursuant to Section 4.02(a) (as a result of reductions to the Total
Revolving Loan Commitment pursuant to Sections 3.03(e) and/or (f)) made with
funds provided to the Company by HFS (except to the extent the increase in the
aggregate liquidation preference of any such HFS Redeemable Capital Stock is
attributable to the accrual of dividends with respect thereto) and (B) clause
(ix) above, the sum of the aggregate principal amount of Chartwell Subordinated
Debt plus the aggregate liquidation preference of all Chartwell Preferred Stock
(excluding Chartwell Preferred Stock theretofore converted into Chartwell
Subordinated Debt) shall in no event exceed the aggregate cash investments made
by Chartwell in the Company (except to the extent that any increase in the
aggregate principal amount of any Chartwell Subordinated Debt or any increase in
the aggregate liquidation preference of any such Chartwell Preferred Stock is
attributable to the accrual of dividends or interest, as the case may be, with
respect thereto).
1.105 Advances, Investments and Loans. The Company will not, and
-------------------------------
will not permit any of its Subsidiaries or Material Joint Ventures to, directly
or indirectly, lend money or credit or make advances to any Person, or purchase
or acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract,
(collectively, "Investments"), or permit any Investment to remain outstanding,
or agree or commit to make any Investment (any such agreement or commitment an
"Investment Commitment"), except that the following shall be permitted (but only
so long as no Default or Event of Default exists at the time of the making of
the respective Investment or Investment Commitment (or would exist immediately
after giving effect thereto) in the case of Investments or Investment
Commitments described in following clauses (viii) through (xii), inclusive):
(i) the Company and its Subsidiaries and Material Joint
Ventures may acquire and hold accounts receivables owing to any of them, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary terms;
(ii) the Company and its Subsidiaries and Material Joint
Ventures may acquire and hold cash and Cash Equivalents;
(iii) the Company may enter into Interest Rate Protection
Agreements and Other Hedging Agreements to the extent permitted by Section
10.04(iii);
(iv) (x) any Subsidiary or Material Joint Venture of the
Company may make intercompany loans of cash to the Company or to any
Wholly-Owned Subsidiary of the Company, any Wholly-Owned Subsidiary of the
Company may make cash equity investments in any other Wholly-Owned
Subsidiary of the Company, and the Company may make intercompany loans of
cash to, or cash equity investments in, its Wholly-Owned Subsidiaries,
provided that to the extent that any such intercompany loan is evidenced by
--------
a promissory note, such promissory note shall be pledged to the Collateral
Agent pursuant to the Pledge Agreement and (y) the Company or any of its
Wholly-Owned Subsidiaries may make intercompany loans to, cash capital
contributions in, guaranty the obligations of, or have Letters of Credit
issued for the benefit of, any Material Joint Venture of the Company (other
than any Material Joint Venture that constitutes a Specified Existing
Investment) or any joint venture partner of such Material Joint Venture,
provided that (i) the aggregate amount of all such Investments (including,
--------
without limitation, the maximum amount of all guarantees, the maximum
amount of all Letters of Credit and the amount of all intercompany loans
and capital contributions as described in following clause (ii))
outstanding at any one time shall not exceed $15,000,000 (determined
without regard to any write-downs or write-offs thereof), (ii) the
aggregate amount of all such intercompany loans and cash capital
contributions outstanding at any one time shall not exceed $5,000,000
(determined without regard to any write-downs or write-offs thereof) and
(iii) to the extent that any such intercompany loan is evidenced by
promissory note, such promissory note shall be pledged to the Collateral
Agent pursuant to the Pledge Agreement;
47
(v) non-cash consideration received by the Company or any of
its Subsidiaries in connection with Asset Sales permitted pursuant to
Sections 10.02(ii), (vii) and (viii), provided that the amount of such non-
--------
cash consideration shall not exceed the limitations provided in Section
10.02(ii) or (viii), as the case may be;
(vi) the Company and its Subsidiaries and Material Joint
Ventures may make loans and advances in the ordinary course of business to
their respective employees so long as the aggregate principal amount
thereof at any time outstanding (determined without regard to any write-
downs or write-offs of such loans and advances) shall not exceed
$1,000,000;
(vii) the Company and its Subsidiaries and Material Joint
Ventures may permit to remain outstanding the Investments that were made
prior to the Initial Borrowing Date to the extent that same are set forth
on Schedule IX (the "Existing Investments") (provided that any additional
--------
Investments with respect thereto (other than the acquisition of additional
equity in any Joint Venture existing as of the Initial Borrowing Date if no
Default or Event of Default exists or would result therefrom) shall be
permitted only if independently justified under the other provisions of
this Section 10.05);
(viii) in addition to Investments made as otherwise permitted
pursuant to this Section 10.05, the Company and its Wholly-Owned
Subsidiaries may make Investments in Hotel Properties (including by making
the respective investment in the Person (other than an Unrestricted
Subsidiary) which owns the respective Hotel Property but which shall not be
a Wholly-Owned Subsidiary of the Company) that are not wholly-owned by the
Company or any of its Wholly-Owned Subsidiaries so long as (i) no Default
or Event of Default then exists or would result therefrom, (ii) all of the
applicable requirements of Section 10.02(ix) (other than clause (i)
thereof) are satisfied with respect to such Investment and (iii) the
aggregate amount of Investments made pursuant to this Section 10.05(viii)
in any fiscal year of the Company does not exceed $10,000,000 in the
aggregate and $5,000,000 in any fiscal year;
(ix) the Company and its Wholly-Owned Subsidiaries may make
Investment Commitments from time to time so long as (i) the respective
Investment Commitment is in respect of an Investment of the type described
in clause (viii) of this Section 10.05, (ii) the respective Investment
Commitment expressly provides that the Company or its respective Wholly-
Owned Subsidiary has no obligation to make the respective Investment unless
same is in compliance with this Agreement (and so long as the Company shall
suffer no penalty or loss of funds as a result of any failure to make the
Investment for the reasons set forth above in this clause (ii)), (iii) all
of the applicable conditions set forth in Section 10.05(viii) are satisfied
with respect to the Investment to be made pursuant to the respective
Investment Commitment (but only to the extent that such Investment is made)
and (iv) the maximum amount which could be required to be invested pursuant
to the respective Investment Commitment in any fiscal year of the Company
shall not exceed that amount set forth in clause (viii) of this Section
10.05, and with any amount so invested pursuant to the respective
Investment Commitment to be considered an Investment made pursuant to
clause (viii) of this Section 10.05;
(x) the Company may establish Subsidiaries, Joint Ventures and
Unrestricted Subsidiaries to the extent permitted by Section 10.16;
(xi) the Company and its Wholly-Owned Subsidiaries may (i) make
Investments (other than Investments in Unrestricted Subsidiaries) so long
as all consideration therefor paid by the Company and its Subsidiaries in
respect of such Investment consists solely of Qualified Capital Stock of
the Company and the proceed thereof and (ii) enter into commitments or
agreements to make Investments ("Qualified Equity Commitments") so long as
all consideration to be paid for the respective Investment pursuant to the
Qualified Equity Commitment consists solely of Qualified Capital Stock of
the Company;
(xii) the Company and its Wholly-Owned Subsidiaries may make
cash Investments in Unrestricted Subsidiaries so long as the aggregate
amount of all such Investments does not exceed the aggregate Net Cash
Proceeds (including. for this purpose, net of any amounts paid by the
Company to HFS
48
pursuant to Section 10.06(viii)) received by the Company from cash equity
investments by Chartwell after the Closing Date (other than the equity
investment described in Section 6.07);
(xiii) the Canadian Borrower may consummate the Canadian
Acquisition, it being agreed that (i) in accordance with the Canadian
Acquisition Documents, as consideration for the Canadian Acquisition, Bear
Financial Corp., a Wholly-Owned Subsidiary of the Company, will acquire,
for C$87,500,000, the secured Indebtedness which encumbers the Canadian
Acquired Assets and the Canadian Borrower will assume such Indebtedness and
(ii) payment of such Indebtedness will be subordinated to payment of the
obligations of the Canadian Borrower under the Loan Documents on terms
satisfactory to the Agents and, at the option of the Agents, such
Indebtedness will be pledged to the Collateral Agent;
(xiv) the Company may make loans to, or guaranty loans of, the
Joint Ventures of the Company, provided that (i) the aggregate principal
--------
amount of such loans and guaranties shall not exceed $15,000,000, (ii) such
loans and guaranties are made in connection with a financing program for
the Joint Ventures that is not, in the aggregate, materially less favorable
to the Company than the Bank of America Facility and (iii) no such loan may
be made if a Default or Event of Default has occurred and is continuing;
and
(xv) the Company may make the Mexican Investment;
(xvi) the Company and each of its Wholly-Owned Subsidiaries
may make Permitted Hotel Acquisitions to the extent permitted by Section
10.02(ix);
(xvii) the Company (directly or through any Subsidiary or Joint
Venture) may make an Investment in the Las Vegas Lease to the extent
permitted by Section 10.04(xv); and
(xviii) the Company and its Subsidiaries may make equity
investment of up to $7,000,000 (not to exceed $1,000,000 per Xxxxxxx Hotel)
in connection with obtaining acquisition and construction financing for
Xxxxxxx Hotels and, to the extent required by any source providing
acquisition or construction financing for such Xxxxxxx Hotels, the Company
and its Subsidiaries may deliver environmental and construction guarantees
in connection therewith.
Notwithstanding the foregoing, the proceeds of the sale of common stock of the
Company described in Section 5.17 may be used solely to fund the Canadian
Acquisition or for other purposes to be approved by the Required Banks (and,
pending such application, may be invested in Cash Equivalents). The Company
agrees that Bear Financial Corp. will not assign or transfer, or create or
suffer to exist a Lien on, any of the Indebtedness described in clause (xiii)
above and will not permit any amendment or waiver of or to such Indebtedness
without the consent of the Agents.
1.106 Transactions with Affiliates. The Company will not, and
----------------------------
will not permit any of its Subsidiaries or Material Joint Ventures to, enter
into any transaction or series of related transactions with any Affiliate of the
Company or any of its Subsidiaries or Material Joint Ventures, other than in the
ordinary course of business and on terms and conditions substantially as
favorable to the Company, such Subsidiary or such Material Joint Venture as
would reasonably be obtained by the Company, such Subsidiary or such Material
Joint Venture at that time in a comparable arm's-length transaction with a
Person other than an Affiliate, except that the following transactions, whether
or not such transactions would otherwise be permitted by this Section 10.06,
shall be permitted:
(i) Restricted Payments may be paid to the extent provided in
Section 10.03 (excluding clause (iv) thereof);
(ii) loans may be made and other transactions may be entered
into by the Company and its Subsidiaries and Material Joint Ventures to the
extent permitted by Sections 10.04 and 10.05;
49
(iii) the Company may make quarterly payments (in advance) of
the Corporate Services Fee, provided that the aggregate amount permitted to
--------
be paid pursuant to this clause (iii) in any fiscal quarter of the Company
shall not exceed $375,000;
(iv) [INTENTIONALLY OMITTED];
(v) the Company and its Subsidiaries and Material Joint
Ventures may pay to HFS or a Subsidiary thereof the Marketing and
Reservation Fee as and when due pursuant to the terms of the respective HFS
Franchise Agreement, and the Company and its Subsidiaries and Material
Joint Ventures may pay to HFS or a Subsidiary thereof the Licensing Fee as
and when due pursuant to the terms of the HFS Master License Agreement;
(vi) [INTENTIONALLY OMITTED];
(vii) [INTENTIONALLY OMITTED];
(viii) [INTENTIONALLY OMITTED];
(ix) so long as no Default or Event of Default then exists, the
Company may pay to HFS an annual guaranty fee (payable quarterly in
arrears) (the "Guaranty Fee") pursuant to the Financing Agreement in an
aggregate amount not to exceed 2% of the Guaranty Amount then in effect,
provided that such Guaranty Fee shall otherwise be subject to the terms of
--------
the HFS Subordination Agreement;
(x) (a) the Company and its Subsidiaries and Material Joint
Ventures may pay to HFS or a Subsidiary thereof the Standard Termination
Fees set forth in the HFS Franchise Agreements and (b) so long as no
Default or Event of Default then exists, the Company and its Subsidiaries
and Material Joint Ventures may pay to HFS or a Subsidiary thereof the
Excess Termination Fees set forth in the HFS Franchise Agreements, provided
--------
that such Excess Termination Fees shall otherwise be subject to the terms
of the HFS Subordination Agreement;
(xi) the Company and its Subsidiaries and Material Joint
Ventures may pay to HFS or a Subsidiary thereof pursuant to the respective
HFS Franchise Agreements such other customary and arm's length charges and
expenses that HFS charges (and on the same basis on which HFS charges) to
its other similarly situated franchisees; and
(xii) the Company may make payments to Xxxxxx 40th & 3rd
Company and Hawaiian Realty Inc. pursuant to the lease of its corporate
headquarters located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx as long as the
aggregate annual payments thereunder do not exceed $600,000 plus the
operating cost and tax escalator increases as set forth therein on the date
hereof.
Except as expressly permitted by clauses (i) through (xii) above, neither the
Company nor any of its Subsidiaries or Material Joint Ventures shall pay any
management, consultant, advisory or other fees to HFS or any Subsidiary of HFS,
and neither the Company nor any of its Subsidiaries or Material Joint Ventures
shall pay any management, consultant, advisory or similar fees to any other
Affiliate of the Company or HFS (excluding payments made by Subsidiaries of the
Company to the Company or a Wholly-Owned Subsidiary of the Company).
1.107 Capital Expenditures. (a) The Company will not, and will
--------------------
not permit any of its Subsidiaries or Material Joint Ventures to, make any
Capital Expenditures, except that during any fiscal year of the Company, the
Company and its Subsidiaries and Material Joint Ventures may make Capital
Expenditures so long as the aggregate amount of Capital Expenditures made by the
Company and its Wholly-Owned Subsidiaries in any such fiscal year when added to
the Company's Allocable Share of the Capital Expenditures made by its Material
Joint Ventures for such fiscal year, does not exceed an amount equal to 6% of
Total Hotel Revenues for such fiscal year.
50
Notwithstanding anything to the contrary contained above, to the extent that
Capital Expenditures made during any fiscal year of the Company are less than
the amount permitted to be made for such fiscal year as set forth above such
unused amount may be carried forward to the immediately succeeding fiscal year
and utilized to make Capital Expenditures of the type permitted above in this
Section 10.07 in excess of the amount permitted above in the following fiscal
year, provided that (x) any amounts carried forward from the immediately
--------
preceding fiscal year shall be deemed to be utilized during the current fiscal
year before the relevant amount for such current fiscal year shall be deemed to
be utilized to make Capital Expenditures during such fiscal year and (y) no
amounts once carried forward to the next fiscal year may be carried forward to
fiscal years thereafter. In addition to the foregoing, the Company and its
Subsidiaries may make additional Capital Expenditures to the extent that any
Permitted Hotel Acquisition made as permitted by Section 10.02(ix) and/or
10.05(viii) constitutes Capital Expenditures.
(b) In addition to the Capital Expenditures permitted to be made
pursuant to clause (a) of this Section 10.07 and the following clause (c) of
this Section 10.07, the amount of insurance proceeds received by the Company and
its Subsidiaries from any Recovery Event may be used by the Company and its
Subsidiaries to make Capital Expenditures to replace or restore any properties
or assets in respect of which such proceeds were paid, in each case to the
extent such proceeds are not used to make Permitted Hotel Acquisitions or are
not required to be applied pursuant to Section 3.03(d), provided that any
--------
proceeds that are so used to make Capital Expenditures pursuant to this clause
(b) are, to the extent required by Section 3.03(d) used within the period of
time as is set forth in such Section 3.03(d).
(c) In addition to the Capital Expenditures permitted to be made
pursuant to clauses (a) and (b) of this Section 10.07, the Company and its
Wholly-Owned Subsidiaries may make Capital Expenditures in any fiscal year of
the Company beginning with its fiscal year commencing on January 1, 1997 in an
amount equal to the Cumulative Retained Residual Excess Cash Amount as in effect
immediately prior to the making of the respective Capital Expenditure.
(d) The Company may consummate the Canadian Acquisition for a
purchase price (including assumed debt but excluding fees relating thereto) not
to exceed C$98,000,000, and such amounts so expended shall not be counted as
expenditures under paragraph (a) above.
(e) The Company may make the Capital Expenditure set forth on
Schedule XII, and such amounts shall not be counted as expenditures under
paragraph (a) above.
1.108 Minimum Consolidated Net Worth. The Company will not permit
------------------------------
Consolidated Net Worth at any time to be less than the sum of (a) $125,000,000
and (b) if positive, 50% of Consolidated Net Income for the period from July 1,
1996 through the last day of the most recent fiscal quarter ending prior to such
time.
1.109 Consolidated Interest Coverage Ratio. The Company will not
------------------------------------
permit the Consolidated Interest Coverage Ratio for any Test Period ended on the
last day of a fiscal quarter to be less than (a) 2.0 to 1.0 for each fiscal
quarter ending on or prior to September 30, 1999 and (b) 3.0 to 1.0 for each
fiscal quarter thereafter.
10.10 Consolidated Current Ratio. The Company will not permit the
--------------------------
Consolidated Current Ratio at any time to be less than 1.0 to 1.0.
10.11 Total Leverage Ratio. The Company will not permit the Total
--------------------
Leverage Ratio on the last day of any fiscal quarter to be greater than (a) 5.0
to 1.0 on and prior to September 30, 1999 and (b) 4.0 to 1.0 thereafter.
10.12 Limitation on Payments of Certain Indebtedness, Modifications
-------------------------------------------------------------
of Certain Indebtedness, Modifications of Certificate of Incorporation, By-Laws
-------------------------------------------------------------------------------
and Certain Agreements, etc. The Company will not, and will not permit any of
---------------------------
its Subsidiaries or Material Joint Ventures to, (i) make (or give any notice in
respect of) any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result of any
change of control or similar event of including, in each case without
limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying
51
when due any HFS Subordinated Indebtedness, any Chartwell Subordinated Debt or
any Permitted Subordinated Indebtedness, (ii) amend or modify, or permit the
amendment or modification of, any provision of the Bank of America Facility, any
HFS Subordinated Indebtedness, any Chartwell Subordinated Debt or any Permitted
Subordinated Indebtedness or any agreement (including, without limitation, any
HFS Subordinated Note) related thereto, (iii) amend or modify. or permit the
amendment or modification of, any provision of any Canadian Acquisition
Document, Management Agreement, Tax Sharing Agreement, HFS Agreement or
Affiliate Agreement (other than any amendment or modification thereto which
would not violate or be inconsistent with any of the terms or provisions of this
Agreement and the other Credit Documents and could not be adverse to the
interests of the Banks in any respect as determined by the Agents) or enter into
any new agreement which would have constituted a Tax Sharing Agreement, HFS
Agreement or Affiliate Agreement if same had been in effect on the Initial
Borrowing Date except for Unrestricted Subsidiary Tax Sharing Agreements entered
into in compliance with Section 10.16(c) and additional HFS Franchise Agreements
in connection with the acquisition of new Hotel Properties, (iv) amend, modify
or change its certificate of incorporation (including, without limitation, by
the filing or modification of any certificate of designation) or by-laws, or any
agreement entered into by it, with respect to its capital stock (including the
Chartwell Stock Purchase Agreement), or enter into any new agreement with
respect to its capital stock, other than any amendments, modifications or
changes pursuant to this clause (iv) or any such new agreements pursuant to this
clause (iv) which would not violate or be inconsistent with any of the terms of
this Agreement and the other Credit Documents and could not in any way adversely
affect the interests of the Banks, (v) amend or modify, or permit the amendment
or modification of, any Joint Venture Agreement in any material respect (it
being agreed that acting under any Joint Venture Agreement in accordance with
its terms, including as to termination rights and buyout provisions, shall not
be restricted by this clause (v)) or (vi) retain or engage, or permit the
retention or engagement of, any Person to manage a Hotel Property in which the
Company and its Subsidiaries have a controlling interest unless the consent of
the Real Estate Committee is obtained, such consent not to be unreasonably
withheld or (vii) consent to or acquiesce in the pledge or assignment by HFS of
any HFS Subordinated Notes.
10.13 Limitation on Certain Restrictions on Subsidiaries and Joint
------------------------------------------------------------
Ventures. The Company will not, and will not permit any of its Subsidiaries or
--------
Material Joint Ventures to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary or Material Joint Venture of the Company to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Company or any of its
Subsidiaries or Material Joint Ventures, or pay any Indebtedness owed to the
Company or any Subsidiary or Material Joint Venture of the Company, (b) make
loans or advances to the Company or any Subsidiary or Material Joint Venture of
the Company, (c) transfer any of its properties or assets to the Company or any
of its Subsidiaries or Joint Ventures or (d) create Liens on its property,
except in each case for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Company or any Subsidiary or
Material Joint Venture of the Company, (iv) customary provisions restricting
assignment of any licensing agreement entered into by the Company or any
Subsidiary or Material Joint Venture of the Company in the ordinary course of
business, and (v) restrictions on the transfer or encumbrance of any assets
subject to a Lien permitted by this Agreement.
10.14 Limitation on Issuance of Capital Stock. (a) The Company will
---------------------------------------
not issue (i) any class of preferred stock (except (x) preferred stock of the
Company issued in accordance with the requirements of Sections 10.04(viii) and
(ix) and (y) any class of preferred stock which has no required redemptions and
no required offers to purchase same by the Company or any of its Subsidiaries or
Material Joint Ventures, whether through the lapse of time, the occurrence of
certain contingencies or otherwise) or (ii) any class of redeemable (except at
the sole option of the Company) common stock.
(b) The Company will not permit any of its Subsidiaries or Material
Joint Ventures to issue any capital stock (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock, except (i) for transfers and replacements of then outstanding
shares of capital stock, (ii) for stock splits, stock dividends and similar or
additional issuances which do not decrease the percentage ownership of the
Company or any of its Subsidiaries in any class of the capital stock of such
Subsidiary or Material Joint Venture, (iii) stock options issued to employees
provided that such options and the capital stock issuable upon
--------
52
the exercise of such stock options are not mandatorily redeemable prior to the
first anniversary of the Final Maturity Date, and (iv) to qualify directors to
the extent required by applicable law.
10.15 Business. The Company will not, and will not permit any of its
--------
Subsidiaries or Joint Ventures to, engage (directly or indirectly) in any
business other than the businesses in which the Company and its Subsidiaries and
Joint Ventures are engaged on the Initial Borrowing Date and reasonable
extensions thereof and businesses incidental thereto, provided that the Company
--------
(x) may not expand or develop any gaming business or venture after the Initial
Borrowing Date and (y) may wind down its existing gaming business and related
Specified Existing Investments.
10.16 Limitation on Creation of Subsidiaries; Unrestricted
----------------------------------------------------
Subsidiaries and Joint Ventures. (a) The Company will not, and will not permit
-------------------------------
any of its Subsidiaries or Joint Ventures to, establish, create or acquire any
additional Subsidiaries or Joint Ventures, except that the Company and its
Wholly-Owned Subsidiaries shall be permitted to establish, create or acquire (x)
Joint Ventures as provided in Section 10.16(b) and (y) at least 90% owned
Subsidiaries in connection with Permitted Hotel Acquisitions and Permitted
Business Acquisitions so long as (i) all of the capital stock of such new
Subsidiary (to the extent that same is a corporation) is pledged pursuant to
(and to the extent required by) the Pledge Agreement and the certificates
representing such stock, together with stock powers duly executed in blank, are
delivered to the Collateral Agent, (ii) all of the partnership interests of such
new Subsidiary (to the extent that same is a partnership) are pledged and
assigned pursuant to (and to the extent required by) the Pledge Agreement and
(iii) any such new domestic Subsidiary executes a counterpart of the
Subsidiaries Guaranty and the Pledge Agreement. In addition, each such new
domestic Subsidiary shall execute and deliver, or cause to be executed and
delivered all other relevant documentation of the type described in Section 5 as
such new domestic Subsidiary would have had to deliver if such new domestic
Subsidiary were a Credit Party on the Initial Borrowing Date.
(b) The Company will not, and will not permit any of its
Subsidiaries or Joint Ventures to, establish, create or acquire any additional
Joint Ventures after the Initial Borrowing Date, except that the Company or any
Wholly-Owned Subsidiary of the Company referenced in following clause (z) may
establish, create or acquire Joint Ventures in connection with Investments
permitted by Section 10.05 from time to time, in each case so long as (x) no
Default or Event of Default exists at the time of the establishment, creation or
acquisition of the respective Joint Venture or shall exist immediately after
giving effect thereto, (y) all Investments therein are permitted pursuant to
Section 10.05 and (z) all equity interests in each Joint Venture are owned
directly by the Company or a Wholly-Owned Subsidiary of the Company which
engages in no business or activities other than the holding of ownership
interests in one or more Joint Ventures and all equity interests therein are
pledged pursuant to (and to the extent required by) the Pledge Agreement,
provided that if any Joint Venture is in the form of a partnership, joint
--------
venture or other business form other than a corporation, the equity interests
therein shall not be directly owned by the Company (but shall be owned by a
Wholly-Owned Subsidiary thereof as referenced above in this clause (z)).
(c) The Company will not, and will not permit any of its
Subsidiaries or Joint Ventures to, establish, create or acquire any Unrestricted
Subsidiary, except that any Wholly-Owned Domestic Subsidiary of the Company
referenced in following clause (z) may establish, create or acquire Unrestricted
Subsidiaries solely in connection with Investments permitted by Section
10.05(xii) from time to time, in each case so long as (w) no Default or Event of
Default exists at the time of the establishment, creation or acquisition of the
respective Unrestricted Subsidiary or shall exist immediately after giving
effect thereto, (x) all Investments therein (including as a result of the
designation thereof as provided in the definition of Unrestricted Subsidiary)
are permitted pursuant to Section 10.05(xii), (y) all equity interests in each
Unrestricted Subsidiary are owned directly by a Wholly-Owned Domestic Subsidiary
of the Company which engages in no business or activities other than the holding
of ownership interests in one or more Unrestricted Subsidiaries and all equity
interests therein are pledged pursuant to (and to the extent required by) the
Pledge Agreement and (z) each such Unrestricted Subsidiary enters into, or
becomes a party to, an Unrestricted Subsidiary Tax Sharing Agreement on terms
and conditions satisfactory to the Required Banks.
SECTION 11. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each an "Event of Default"):
53
1.111 Payments. The Company shall (i) default in the payment when due
--------
of any principal of any Loan or any Note, (ii) default in the payment of any
Unpaid Drawing for three or more Business Days after the date the respective
Drawing was made or, if no Default or Event of Default exists pursuant to
Section 11.05 for three or more Business Days after the receipt by the Company
of notice of the respective Drawing by the Administrative Agent or the Issuing
Bank or (iii) default, and such default shall continue unremedied for three or
more Business Days, in the payment when due of any interest on any Loan or Note
or Unpaid Drawing, or any Fees or any other amounts owing hereunder or under any
other Credit Document; or
1.112 Representations, etc. Any representation, warranty or
--------------------
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
1.113 Covenants. Any Credit Party shall (i) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 9.11 or Section 10 or (ii) default in the due performance or observance
by it of any other term, covenant or agreement contained in this Agreement and
such default shall continue unremedied for a period of 30 days after written
notice to the Company by the Administrative Agent or any Bank; or
1.114 Default Under Other Agreements. (i) The Company or any of its
------------------------------
Subsidiaries or Material Joint Ventures shall (x) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (y) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (ii) any
Indebtedness (other than the Obligations) of the Company or any of its
Subsidiaries or Material Joint Ventures shall be declared to be due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof provided that it shall not be a
--------
Default or an Event of Default under this Section 11.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (i) and
(ii) is at least $1,000,000; or
1.115 Bankruptcy, etc. The Company or any of its Subsidiaries or
---------------
Material Joint Ventures shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in
effect, or any successor thereto (the "Bankruptcy Code"), or an involuntary case
is commenced against the Company or any of its Subsidiaries or any such Material
Joint Ventures and the petition is not controverted within 10 days, or is not
dismissed within 60 days, after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of the Company or any of its Subsidiaries or
any such Material Joint Ventures or the Company or any of its Subsidiaries or
any such Material Joint Ventures commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or any of its Subsidiaries or any
such Material Joint Ventures, or there is commenced against the Company or any
of its Subsidiaries or any such Material Joint Ventures any such proceeding
which remains undismissed for a period of 60 days, or the Company or any of its
Subsidiaries or any such Material Joint Ventures is adjudicated insolvent or
bankrupt, or any order of relief or other order approving any such case or
proceeding is entered and is not vacated or stayed within 60 days, or the
Company or any of its Subsidiaries or any such Material Joint Ventures suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days, or
the Company or any of its Subsidiaries or any such Material Joint Ventures makes
a general assignment for the benefit of creditors, or any partnership and/or
corporate action is taken by the Company or any of its Subsidiaries or any such
Material Joint Ventures for the purpose of effecting any of the foregoing; or
1.116 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer
54
such Plan, any Plan is, shall have been or is likely to be terminated or to be
the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability a contribution required to be made to a Plan or a
Foreign Pension Plan has not been timely made, the Company or any Subsidiary of
the Company or any ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 409, 502(i), 502(1), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971,
4975 or 4980 of the Code, or the Company or any of its Subsidiaries has incurred
or is likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or employee pension benefit plans (as defined in Section 3(2) of
ERISA) or Foreign Pension Plans; (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; (c) which lien, security
interest or liability, individually and/or in the aggregate, in the opinion of
the Required Banks, could reasonably be expected to have a material adverse
effect upon the business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole; or
1.117 Security Documents. Any Security Document shall cease to be in
------------------
full force and effect, or shall cease to give the Collateral Agent for the
benefit of the Secured Creditors, the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral), in favor of the
Collateral Agent superior to and prior to the rights of all third Persons, and
subject to no other Liens, or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to such Security Document and such default shall
continue beyond any grace period specifically applicable thereto pursuant to the
terms of such Security Document; or
1.118 Guaranty. Any Guaranty shall cease to be in full force or
--------
effect as to the relevant Guarantor, or any Guarantor or Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under the relevant Guaranty, or any Guarantor Event of Default shall occur, or
at any time the Maximum Guaranteed Amount for any reason whatsoever shall be
less than an amount equal to the remainder of (x) $75,000,000 less (y) the
aggregate amount of cash actually loaned by HFS to the Company after the Initial
Borrowing Date pursuant to Section 10.04(vii) and/or invested by HFS in the
Company pursuant to Qualified Equity Investments as described in the definition
thereof contained herein, so long as all such cash loaned or invested was
actually used by the Company to repay the principal of Loans pursuant to the
requirements of Section 4.02(a) (as a result of a reduction to the Total
Revolving Loan Commitment pursuant to Sections 3.03(e) and (f)); or
1.119 HFS Subordination Agreement. The HFS Subordination Agreement
---------------------------
shall cease to be in full force or effect for any reason, or HFS or any Person
acting by or on behalf of HFS shall deny or disaffirm HFS's obligations
thereunder or HFS shall default, and such default shall continue unremedied for
a period of 10 days after written notice to HFS by the Administrative Agent or
any Bank, in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant thereto; or
11.10 Judgments. One or more judgments or decrees shall be entered
---------
against the Company or any of its Subsidiaries or Material Joint Ventures
involving in the aggregate for the Company and its Subsidiaries and any such
Material Joint Ventures a liability (not fully covered by a reputable and
solvent insurance company or not paid) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 60 consecutive days, and the
aggregate amount of all such judgments exceeds $1,000,000; or
11.11 HFS Franchise Agreements, etc. (i) Any Franchise Agreement
-----------------------------
shall be terminated or any event or condition shall exist which would enable any
party to such Franchise Agreement to terminate or suspend its obligations
thereunder or (ii) at any time any Hotel Property shall be operated as other
than a "Travelodge", "Thriftlodge" or any other nationally recognized hotel
brand which the Chairman of the Board of Directors and the chief financial
officer of the Company (in a certificate signed by them delivered to the Agents)
have determined to be in the best interests of the Company, provided that (A) a
--------
Hotel Property shall not be deemed to be subject to the events described in
preceding clause (i) or (ii) if the respective Hotel Property, in the ordinary
course of business
55
and with the approval of the Board of Directors of the Company (or an authorized
committee of such Board), is being changed to another nationally recognized
hotel brand, and in connection with the change-over, the respective Hotel
Property is for a period, in no event to exceed 90 days, operating other than
under a nationally recognized hotel brand and (B) it shall not be a Default or
an Event of Default under clause (i) or (ii) of this Section 11.11 so long as
all Hotel Properties subject to any of the events described above in this
Section 11.11 (after giving effect to preceding clause (A)) at any time do not
represent either more than 10% of the total assets of the Company and its
Subsidiaries (after reduction for minority interests) as of the last day of the
most recently ended fiscal quarter of the Company or more than 10% of the Total
Hotel Revenues of the Company and its Subsidiaries (after reduction for minority
interests) for the Test Period then most recently ended; or
11.12 Total Unrestricted Subsidiary Leverage Ratio. The Total
--------------------------------------------
Unrestricted Subsidiary Leverage Ratio at any time is greater than 5.00: 1.00;
or
11.13 Unrestricted Subsidiary Tax Payments. Any Unrestricted
------------------------------------
Subsidiary of the Company shall not pay any amounts owing by it under any
Unrestricted Subsidiary Tax Sharing Agreement to which it is a party and such
failure shall continue unremedied for 10 or more days;
Then, and in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Banks, shall by written notice to the Company, take any
or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Bank or the holder of any Note to enforce its claims
against any Credit Party (provided, that, if an Event of Default specified in
--------
Section 11.05 shall occur with respect to a Borrower or if a Guarantor Event of
Default specified in Section 14(d) of the HFS Guaranty shall occur with respect
to HFS, the result which would occur upon the giving of written notice by the
Administrative Agent to the Company as specified in clauses (i) and (ii) below
shall occur automatically without the giving of any such notice): (i) declare
the Total Revolving Loan Commitment terminated, whereupon the Revolving Loan
Commitment and Revolving C$ Loan Commitment of each Bank shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and the Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit, which may be terminated, in accordance with its
terms; (iv) direct the Company to pay (and the Company agrees that upon receipt
of such notice, or upon the occurrence of an Event of Default specified in
Section 11.05 with respect to the Company, it will pay) to the Collateral Agent
at the Payment Office such additional amount of cash, to be held as security by
the Collateral Agent, as is equal to the aggregate Stated Amount of all Letters
of Credit issued for the account of the Company and then outstanding; (v)
enforce, as Collateral Agent, all of the Liens and security interests created
pursuant to the Pledge Agreement; and (vi) take any of the actions specified in
clause (ii) of the proviso to Sections 1.06(a) and (b) or in clause (v) of the
proviso to Section 1.09.
SECTION 12. Definitions and Accounting Terms.
--------------------------------
1.121 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a three-
month certificate of deposit of a member bank of the Federal Reserve System in
excess of $100,000 (including, without limitation, any marginal,
56
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted Consolidated Company EBITDA" for any period shall mean
Adjusted Consolidated EBITDA of the Company for such period, provided that in
--------
determining Consolidated EBITDA (as required pursuant to the definition of
Adjusted Consolidated EBITDA) of the Company for such period, Consolidated
Company Net Income (and not Consolidated Net Income) shall be used, with the
term "Consolidated Company Net Income" being deemed inserted in lieu of the term
"Consolidated Net Income" in each place such term is used in the definition of
Consolidated EBITDA contained herein.
"Adjusted Consolidated EBITDA" any Person for any period shall mean
Consolidated EBITDA of such Person for such period, but without giving effect to
any gains or losses from sales of assets other than inventory in the ordinary
course of business.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments, the Adjusted Total Revolving Loan
Commitment and the Adjusted Total Revolving C$ Loan Commitment at a time when
the Total Revolving Loan Commitment, Adjusted Total Revolving Loan Commitment or
the Adjusted Total Revolving C$ Loan Commitment, as the case may be, has been
terminated shall be references to the Revolving Loan Commitments, Adjusted Total
Revolving Loan Commitment or the Adjusted Total Revolving C$ Loan Commitment, as
the case may be, in effect immediately prior to such termination, provided that
--------
(A) no Bank's Adjusted Percentage shall change upon the occurrence of a Bank
Default from that in effect immediately prior to such Bank Default if after
giving effect to such Bank Default, and any repayment of Loans at such time
pursuant to Section 4.02(a) or otherwise, the sum of (i) the Dollar Equivalent
Amount of the aggregate outstanding principal amount of Loans of all Non-
Defaulting Banks plus (ii) the Letter of Credit Outstandings, exceeds the
Adjusted Total Revolving Loan Commitment; (B) the changes to the Adjusted
Percentage that would have become effective upon the occurrence of a Bank
Default but that did not become effective as a result of the preceding clause
(A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (i) the Dollar Equivalent Amount of
the aggregate outstanding principal amount of the Loans of all Non-Defaulting
Banks plus (ii) the Letter of Credit Outstandings is equal to or less than the
Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's
Adjusted Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Bank's Loans, or of Unpaid Drawings with respect to Letters of
Credit, that were made during the period commencing after the date of the
relevant Bank Default and ending on the date of such change to its Adjusted
Percentage must be returned to the Company or the Canadian Borrower, as the case
may be, as a preferential or similar payment in any bankruptcy or similar
proceeding of the Company or the Canadian Borrower, as the case may be, then the
change to such Non-Defaulting Bank's Adjusted Percentage effected pursuant to
said clause (B) shall be reduced to that positive change, if any, as would have
been made to its Adjusted Percentage if (x) such repayments had not been made
and (y) the maximum change to its Adjusted Percentage would have resulted in the
sum of the Dollar Equivalent Amount of the outstanding principal of Loans made
by such Bank plus such Bank's new Adjusted Percentage of Letter of Credit
Outstandings equalling such Bank's Revolving Loan Commitment at such time.
"Adjusted Total Revolving C$ Loan Commitment" shall mean, at any time,
the Total Revolving C$ Loan Commitment at such time less the aggregate Revolving
C$ Loan Commitments of all Defaulting Banks at such time.
"Adjusted Total Revolving Loan Commitment" shall mean, at any time,
the Total Revolving Loan Commitment at such time less the aggregate Revolving
Loan Commitments of all Defaulting Banks at such time.
57
"Administrative Agent" shall mean The Chase Manhattan Bank, in its
capacity as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 13.09.
"Affiliate" shall mean, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors, officers and partners of such Person) controlled by, or under direct
or indirect common control with such Person or (ii) that directly or indirectly
owns more than 5% of any class of the voting securities or capital stock of or
equity interests in such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly the power to direct or
cause the direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.
Notwithstanding anything to the contrary contained above, for all purposes of
this Agreement, HFS and its Subsidiaries and Affiliates shall be deemed to be
Affiliates of the Company and its Subsidiaries.
"Agent" shall mean and include the Administrative Agent, the
Collateral Agent and the Syndication Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed, refinanced or replaced from
time to time.
"Allocable Share" shall mean, with respect to any Joint Venture and
non-Wholly-Owned Subsidiary and event or circumstance under this Agreement that
requires the determination thereof, that percentage of such Joint Venture's or
non-Wholly-Owned Subsidiary's equity interests that are owned (directly or
indirectly) by the Company.
"Applicable Margin" shall mean on any day with respect to any (i) $
Eurodollar Loan, (ii) Commitment Fee or (iii) C$ Eurodollar Loan, the applicable
margin set forth below under the respective captions "$ Eurodollar Margin",
"Commitment Fee" or "C$ Eurodollar Margin", as applicable:
$ C$
Total Eurodollar Commitment Eurodollar
Outstandings Margin Fee Margin
-------------------- ----------- ----------- -----------
Equal or less than 0.400% 0.200% 0.400%
$75 million
Equal or less than 0.500% 0.200% 0.500%
$85 million
Equal or less than 0.600% 0.250% 0.600%
$95 million
Equal or less than 0.650% 0.250% 0.650%
$105 million
Equal or less than 0.700% 0.300% 0.700%
$115 million
Equal or less than 0.750% 0.300% 0.750%
$125 million
Equal or less than 0.875% 0.375% 0.875%
$150 million
Notwithstanding anything to the contrary contained in this definition:
(a) the Applicable Margin shall be increased by .25% per annum on
that portion of the Total Outstandings which exceeds the Guaranty Amount if
the Consolidated Interest Coverage Ratio for any Test Period ended on the
last day of a fiscal quarter is less than 3.0 to 1.0, any such increase to
be
58
effective on the date of delivery of the Company's financial statements
under Section 9.01(b) or (c), as the case may be, and the related officer's
certificate under Section 9.01(e) and to remain effective until the date of
delivery of the Company's financial statements under Section 9.01(b) or (c)
and the related officer's certificate under Section 9.01(e) for the next
fiscal period (it being agreed that (i) the Applicable Margins shall not be
increased by more than .25% per annum at any time pursuant to this
paragraph (a) and the Applicable Margin on that portion of the Total
Outstandings which exceeds the Guaranty Amount shall automatically be
increased by .25% per annum on the date that the Company is required and
fails to deliver its financial statements and related officer's certificate
for any fiscal period pursuant to Sections 9.01(b), (c) and (e) until such
statements and certificates are delivered and (ii) the specific Loans and
Letters of Credit to which such increased Applicable Margin shall apply
shall be determined by the Administrative Agent in its sole discretion);
(b) the Applicable Margin shall be increased by the per annum
percentage, if any, by which applicable margin for eurodollar loans under
HFS's primary bank credit agreement exceeds or would exceed .40% per annum;
and
(c) to the extent that the Applicable Margin for Eurodollar Loans
exceeds 1.00%, the Applicable Margin for $ Base Rate Loans shall be such
Applicable Margin for $ Eurodollar Loans less 1.00%
"Approved Bank" shall have the meaning provided in the definition of
"Cash Equivalents."
"Asset Sale" shall mean (i) any Recovery Event or (ii) any sale,
transfer or other disposition by the Company or any of its Subsidiaries or Joint
Ventures to any Person other than the Company or a Wholly-Owned Subsidiary of
the Company of any asset (including, without limitation, any capital stock or
other securities of another Person) of the Company or any of its Subsidiaries or
Joint Ventures other than (x) any sale, transfer or disposition permitted by
Sections 10.02(v) and (xii) and (y) any sale, transfer or disposition where the
fair market value of the consideration therefor is less than or equal to
$100,000.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Authorized Financial Officer" of any Credit Party shall mean any of
the Chief Financial Officer, the Treasurer or the Chief Accounting Officer of
such Credit Party.
"Authorized Officer" of any Credit Party shall mean any of the
President, any Authorized Financial Officer or any Vice-President of such Credit
Party or any other officer of such Credit Party which is designated in writing
to the Administrative Agent by any of the foregoing officers of such Credit
Party as being authorized to give such notices under this Agreement.
"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to Section
14.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing in violation
of this Agreement or (ii) a Bank having notified in writing the Company and/or
the Administrative Agent that it does not intend to comply with its obligations
under Section 1.01 or 2.04 including, without limitation, as a result of any
takeover of such Bank by any regulatory authority or agency.
"Bank of America Facility" shall mean the credit facilities made
available by Bank of America National Trust & Savings Association to Joint
Ventures of FHI pursuant to the terms of that certain Letter Loan Agreement,
dated June 17, 1994, among Bank of America National Trust & Savings Association,
FHI, Forte (U.K.), Limited Forte Plc and certain affiliates thereof, as in
effect on the Initial Borrowing Date.
59
"Bank Termination Date" shall mean that date occurring after the
Effective Date upon which the Total Revolving Loan Commitment and all Letters of
Credit shall have terminated and all Loans, Notes and Unpaid Drawings, together
with interest, Fees and all other Obligations incurred hereunder and thereunder,
are paid in full to the Banks; provided that if any amount so received by the
--------
Banks must be disgorged by them, then the Bank Termination Date shall be deemed
to have not occurred until such future time as the foregoing conditions are once
again satisfied.
"Bankruptcy Code" shall have the meaning provided in Section 11.05.
"Base Rate" at any time shall mean the highest of (i) the rate which
is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of
1% in excess of Federal Funds Rate and (iii) the Prime Lending Rate.
"BNS" shall mean The Bank of Nova Scotia in its individual capacity.
"Borrower" shall mean each of the Company and the Canadian Borrower.
"Borrowing" shall mean (i) the borrowing of one Type of Revolving Loan
from all the Banks on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans of such Type
the same Interest Period, provided that $ Base Rate Loans or Revolving C$ Loans
--------
made at an alternate rate of interest incurred pursuant to Section 1.10(b) shall
be considered part of the related Borrowing of Eurodollar Loans and (ii) the
borrowing of a Swingline Loan.
"Business Day" shall mean (i) for all purposes other than as covered
by clauses (ii) and (iii) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close, (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in the New York interbank Eurodollar market and (iii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Revolving C$ Loans, any day which is a Business Day
described in clauses (i) and (ii) above and which is not a Saturday, Sunday or
other day which shall be in Toronto, Ontario a legal holding or a day on which
banking institutions are authorized or required by law or other government
actions to close.
"Calculation Period" shall mean the period of four consecutive fiscal
quarters last ended before the date of the respective Permitted Hotel
Acquisition or incurrence of Permitted Subordinated Indebtedness which requires
calculations to be made on a Pro Forma Basis.
--- -----
"Canadian Acquired Assets" shall mean the property purchased by the
Canadian Borrower under the Canadian Acquisition Documents, generally consisting
of 20 hotels and a 50% interest in another hotel, all operating under the
"Travelodge" franchise, and related assets.
"Canadian Acquisition" shall mean the purchase by the Canadian
Borrower of the Canadian Acquired Assets pursuant to the Canadian Acquisition
Documents.
"Canadian Acquisition Documents" shall mean the collective reference
to the (i) the Contract of Sale dated as of July 16, 1996 among CPLP, as seller,
the Canadian Borrower, as purchaser, and certain others and (ii) all other
documents entered into or delivered in connection with the Canadian Acquisition.
"Canadian Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Canadian Borrowing Date" shall mean the first date on which the
Canadian Borrower is entitled to borrow or have a Letter of Credit issued for
its account under this Agreement, which shall be the date on which the Canadian
Acquisition is consummated and the conditions therefor set forth in Section 6
are satisfied.
60
"Canadian Dollars" and the sign "C$" shall each mean freely
transferable lawful money of Canada.
"C$ Eurodollar Loans" shall mean Eurodollar Loans denominated in
Canadian Dollars.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and the amount of Capitalized Lease
Obligations incurred by such Person.
"Capital Stock" of any Person means all shares, interests,
participations, partnership interests or other equivalents (however designated)
of such Persons' capital stock or other equity interests.
"Capitalized Interest" shall mean interest that is capitalized and is
not counted as interest expense in accordance with GAAP.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
--------
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Bank or (y)
any bank whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent thereof
(any such bank or Bank, an "Approved Bank"), in each case with maturities of not
more than six months from the date of acquisition, (iii) commercial paper issued
by any Approved Bank or by the parent company of any Approved Bank and
commercial paper issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's
or guaranteed by any industrial company with a long term unsecured debt rating
of at least A or A2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, and in each case maturing within six months after the date of
acquisition, (iv) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's and (v) investments in
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment,
pursuant to a note, receivable or otherwise, in connection with such Asset Sale,
but only as and when so received) received by the Company or any of its
Subsidiaries or Joint Ventures from such Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. (S) 9601 et seq.
-- ---
"Change of Control" shall mean (i) the direct or indirect acquisition
by any Person or a group (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act), other than (x) HFS and its Subsidiaries and/or (y)
Chartwell and/or (z) FSNL (collectively, the "Designated Persons"), of
beneficial ownership (as such term is defined in Rule 13D-3 promulgated under
the Securities Exchange Act), of more of the outstanding shares of common stock
of the Company (on a fully diluted basis) than is collectively beneficially
owned by the Designated Persons or (ii) the Board of Directors of the Company
shall not consist of a majority of Continuing Directors or (iii) prior to the
date of the first widely distributed primary public offering by the Company of
its nonredeemable common stock after the Initial Borrowing Date (the "Public
Offering Date"), the
61
Designated Persons collectively shall fail to have beneficial ownership of
shares representing at least a majority of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company or (iv)
after the Public Offering Date, the Designated Persons collectively shall fail
to have beneficial ownership of shares representing at least 25% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Company or (v) Chartwell or FSNL shall sell or dispose of
any common stock of the Company or convert any common stock of the Company into
any other class of Capital Stock. For purposes of this definition of "Change of
Control", shares of common stock of the Company shall be deemed to be
beneficially owned by Chartwell and/or FSNL only if Chartwell effectively has
sole voting control of such shares (or FSNL is required to vote its shares in
the same way that Chartwell votes its shares).
"Chartwell" shall mean Chartwell Leisure Associates, L.P., any other
partnership controlled by one or more of the existing partners of Chartwell
Leisure Associates, L.P. on the Initial Borrowing Date, Chartwell Leisure
Associates X.X. XX or any Affiliate thereof or other investors therein in each
case reasonably acceptable to the Administrative Agent.
"Chartwell Preferred Stock" shall mean the class of the Company's
preferred stock issued to Chartwell satisfying the applicable requirements of
Section 10.04(ix) and containing such other terms as are reasonably acceptable
to the Administrative Agent.
"Chartwell Preferred Stock/Subordinated Debt" shall mean, as the
context may require, the Chartwell Preferred Stock and/or the Chartwell
Subordinated Debt.
"Chartwell Stock Purchase Agreement" shall mean the Amended and
Restated Stock Purchase Agreement dated as of March 14, 1996 among the Company
and the purchasers named therein.
"Chartwell Subordinated Debt" shall mean the subordinated debt of the
Company issued upon conversion of any outstanding shares of Chartwell Preferred
Stock in accordance with the terms thereof, it being understood and agreed,
however, that (i) the Chartwell Preferred Stock may not be so converted (and
shall expressly provide that no such conversion shall be effective) without the
prior written consent of the Required Banks (which consent may be granted or
withheld by the Banks in their sole discretion), (ii) the Chartwell Subordinated
Debt shall satisfy the applicable requirements of Section 10.04(ix) and (iii)
all terms and conditions of the Chartwell Subordinated Debt shall be required to
be satisfactory in form and substance to the Required Banks.
"Chase" shall mean The Chase Manhattan Bank in its individual
capacity.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and ruling issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to the Pledge Agreement or the Security Agreement.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Pledge Agreement.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Commitments" shall mean the collective reference to the Revolving
Loan Commitments, the Revolving C$ Loan Commitments and the Swingline
Commitment.
62
"Company" shall have the meaning provided in the first paragraph of
this Agreement.
"Company Guaranty" shall have the meaning specified in Section 5.08.
"Consolidated Company Net Income" shall mean, for any period, the net
income (or loss) of the Company and its Subsidiaries for such period, determined
on a consolidated basis; provided that (i) the net income (if positive) for such
--------
period of any other Person which is not a Wholly-Owned Subsidiary of the Company
or is accounted for by the Company by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions actually
paid by such Person during such period to the Company or a Wholly-Owned
Subsidiary of the Company (provided that any such payments made in January 1997
--------
shall, for purposes of this Agreement, be treated as though made in December
1996), (ii) the net income (or loss) of any other Person acquired by the Company
or a Subsidiary of the Company in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, (iii)
Consolidated Net Income shall, without duplication, be reduced by the aggregate
amount of fees and payments by the Company or its Subsidiaries pursuant to
Section 10.06(iii), (v), (vii), (ix), (x) and (xi), but shall not be reduced by
any other fees paid by the Company and its Subsidiaries to HFS as otherwise
permitted by this Agreement and (iv) the net income of each Unrestricted
Subsidiary shall be wholly excluded.
"Consolidated Current Assets" shall mean, at any time, the amounts
that would be classified as consolidated current assets of the Company and its
Subsidiaries in accordance with generally accepted accounting principles in a
consolidated balance sheet.
"Consolidated Current Liabilities" shall mean, at any time, the
amounts that would be classified as consolidated current liabilities of the
Company and its Subsidiaries at such time in accordance with generally accepted
accounting principles in a consolidated balance sheet, but excluding the current
portion of any Indebtedness under this Agreement and the current portion of any
other long-term Indebtedness which would otherwise be included therein.
"Consolidated Current Ratio" at any date shall mean the ratio of
Consolidated Current Assets to Consolidated Current Liabilities of such date,
provided, however, any non-cash write-offs with respect to, and any losses from
--------
the disposition of, the Gaming Assets shall be excluded in determining the
Consolidated Current Ratio.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Company and its Wholly-Owned Subsidiaries plus, without duplication, the
Company's Allocable Share of any Indebtedness of a Joint Venture, in either case
as would be required to be reflected on the liability side of a balance sheet as
prepared in accordance with generally accepted accounting principles and as
determined on a consolidated basis, but including, in any event, (w) the
Guaranty Inclusion Amount, (x) all Loans and Letters of Credit, (y) the
aggregate amount of Indebtedness then outstanding as evidenced by Redeemable
Capital Stock (including any such Redeemable Capital Stock issued in accordance
with Section 10.04(viii)) and (z) the amount of outstanding HFS Subordinated
Indebtedness and Permitted Subordinated Indebtedness, if any, provided that,
--------
notwithstanding the foregoing, the term Consolidated Debt shall exclude all
outstanding Chartwell Preferred Stock/Subordinated Debt and up to $2,000,000 per
year of the Company's guaranty obligations in respect of the Las Vegas Lease
permitted by Section 10.04(xv).
"Consolidated EBITDA" shall mean, for any Person and period, (A) the
sum of the amounts for such Person and period of (i) Consolidated Net Income,
(ii) consolidated interest expense of such Person for such period, to the extent
same reduced Consolidated Net Income for such period, (iii) provisions for taxes
based on income, to the extent same reduced Consolidated Net Income for such
period, (iv) depreciation expense, to the extent same reduced Consolidated Net
Income for such period, (v) amortization expense, to the extent same reduced
Consolidated Net Income for such period, (vi) any other non-cash items reducing
the Consolidated Net Income of such Person for such period, and (vii) any cash
receipts of such Person or a Wholly-Owned Subsidiary of such Person during such
period that represent items included in Consolidated Net Income of such Person
for a prior period which were excluded from Consolidated EBITDA of such Person
for such prior period by virtue of clause (B)(i) of this definition, minus (B)
-----
the sum of (i) all non-cash items increasing the Consolidated Net Income
63
of such Person for such period and (ii) any cash expenditures of such Person
during such period to the extent such cash expenditures (x) did not reduce the
Consolidated Net Income of such Person for such period and (y) were applied
against reserves that constituted non-cash items which reduced the Consolidated
Net Income of such Person during prior periods, all as determined on a
consolidated basis for such Person and its Subsidiaries in accordance with GAAP,
provided, however, any non-cash write-offs with respect to, and any losses from
--------
the disposition of, the Gaming Assets shall be excluded in determining
Consolidated EBITDA.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (x) Adjusted Consolidated EBITDA of the Company for such period to (y)
Consolidated Interest Expense of the Company for such period, provided, however
--------
that (i) for the purposes of calculating the Consolidated Interest Coverage
Ratio for the Test Period ending on (a) March 31, 1997, Adjusted Consolidated
EBITDA of the Company shall be the Adjusted Consolidated EBITDA of the Company
for such Test Period divided by 85% and (b) June 30, 1997, Adjusted Consolidated
EBITDA of the Company shall be the Adjusted Consolidated EBITDA of the Company
for such Test Period divided by 95% and (ii) any non-cash write-offs with
respect to, and any losses from the disposition of, the Gaming Assets shall be
excluded in determining the Consolidated Interest Coverage Ratio.
"Consolidated Interest Expense" shall mean, for any Person and period,
the total consolidated interest expense of such Person and its Wholly-Owned
Subsidiaries and the Allocable Share of the interest expense of such Person's
non-Wholly-Owned Subsidiaries and Joint Ventures for such period (calculated
without regard to any limitations on the payment thereof) plus, without
duplication, that portion of Capitalized Lease Obligations of such Person and
its Wholly-Owned Subsidiaries representing the interest factor for such period
and the Allocable Share of that portion of Capitalized Lease Obligations of such
Person's non-Wholly-Owned Subsidiaries and Joint Ventures representing the
interest factor for such period, but excluding the amortization of any deferred
financing costs incurred in connection with this Agreement, less interest income
of such Person and its Wholly-Owned Subsidiaries and the Allocable Share of the
interest income of such Person's non-Wholly-Owned Subsidiaries and Joint
Ventures for such period. Notwithstanding anything to the contrary contained
elsewhere in this Agreement or the requirements of generally accepted accounting
principles, in calculating Consolidated Interest Expense of the Company, (v) the
amount of Capitalized Interest incurred during any period shall be added as a
component of Consolidated Interest Expense, (w) the amount of the Guaranty Fee
paid or accrued during any period shall be added as a component of Consolidated
Interest Expense, (x) accrued dividends on any Redeemable Capital Stock
(excluding accrued dividends on the Chartwell Preferred Stock) shall be added as
a component of Consolidated Interest Expense, and (y) the interest expense on
the Chartwell Subordinated Debt shall be excluded.
"Consolidated Net Income" shall mean, for any Person and period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis; provided that (i) in determining
--------
Consolidated Net Income of the Company, the net income of any other Person which
is not a Wholly-Owned Subsidiary of the Person or is accounted for by such
specified Person by the equity method of accounting shall be included only to
the extent of the Company's direct or indirect equity interests in such net
income (taking the Company's direct or indirect distributable share thereof), in
each case reduced to the extent that the declaration or payment of dividends or
distributions by such other Person during such period is not at the time
permitted by operation of the terms of its charter or any other agreement or
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such other Person or requires the consent of any other Person
other than the specified Person as a Wholly-Owned Subsidiary thereof, (ii) the
net income (or loss) of any other Person acquired by such specified Person or a
Subsidiary of such Person in a pooling of interests transaction for any period
prior to the date of such acquisition shall be excluded, (iii) Consolidated Net
Income of the Company shall, without duplication, be reduced by the aggregate
amount of fees and payments by the Company or its Subsidiaries pursuant to
Sections 10.06(iii), (v), (vii), (ix), (x) and (xi), but shall not be reduced by
any other fees paid by the Company and its Subsidiaries to HFS as otherwise
permitted by this Agreement and (iv) in determining Consolidated Net Income of
the Company. the net income of each Unrestricted Subsidiary shall be wholly
excluded.
"Consolidated Net Worth" shall mean, at any time, all items which
would be included under shareholders' equity on a consolidated balance sheet of
the Company in accordance with generally accepted accounting principles,
provided, however, any non-cash write-offs with respect to the Gaming Assets
--------
shall be excluded in determining Consolidated Net Worth.
64
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
-------- -------
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Continuing Directors" shall mean the directors of the Company on the
Effective Date and each other director, if such other director's nomination for
election to the Board of Directors of the Company is recommended by a majority
of the then Continuing Directors or is recommended by a committee of the Board
of Directors a majority of which is composed of the then Continuing Directors.
"Corporate Services Agreement" shall mean the Amended and Restated
Corporate Services Agreement, dated as of January 24, 1996, between the Company
and HFS.
"Corporate Services Fee" shall mean an annual fee equal to $1,500,000
which Corporate Services Fee shall be payable on a quarterly basis in advance of
the services to be performed.
"CPLP" shall mean Capital Partners Limited Partnership, a limited
partnership formed under the laws of the Province of Ontario.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, the
Pledge Agreement, the Security Agreement, each Guaranty and the HFS
Subordination Agreement.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean HFS, the Borrowers, and each Subsidiary
Guarantor.
"Cumulative Retained Residual Excess Cash Flow Amount" shall initially
be $0, provided that the Cumulative Retained Residual Excess Cash Flow Amount
--------
shall be (i) increased on each April 15, commencing April 15, 1998, by an amount
equal to 50% of the Residual Excess Cash Flow for the immediately preceding
fiscal year (or if Residual Excess Cash Flow is a negative amount for such
fiscal year, the Cumulative Retained Residual Excess Cash Flow Amount shall be
reduced by 100% of such amount) and (ii) reduced, on each date upon which (x)
any Restricted Payment is made pursuant to Section 10.03(vi), by the amount of
such Restricted Payment and (y) any Capital Expenditures are made pursuant to
Section 10.07(c), by the amount of such Capital Expenditure.
"Cumulative Unrestricted Subsidiary Dividend Amount" shall mean, at
any time, the aggregate amount of cash dividends or distributions received by
the Company or a Wholly-Owned Subsidiary thereof from all Unrestricted
Subsidiaries (other than any such dividends or distributions the proceeds of
which are to pay any such Unrestricted Subsidiary's portion of any taxes payable
by the Company or a Wholly-Owned Subsidiary thereof), with the Cumulative
Unrestricted Subsidiary Dividend Amount to be reduced on each date on which, and
in the amount by which, the Company makes a Restricted Payment pursuant to
Section 10.03(vii).
65
"Currency" shall mean the collective reference to Dollars and Canadian
Dollars.
"Current Consolidated Tax Rate" means, with respect to any Person for
any period, the combined highest marginal U.S. federal, state and local income
tax rate (calculated by (i) taking into account the deductibility of state and
local income taxes for U.S. federal income tax purposes and (ii) using the
highest marginal state income tax rate imposed by any state in which the Company
is doing business) during such period on any incremental ordinary income (i.e.,
----
income in excess of the income generated by such Person during the respective
period) of such Person.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividends" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or partners or authorized or made any other distribution, payment or delivery of
property (other than common stock of such Person) or cash to its stockholders or
partners as such, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for a consideration any shares of any class of its
capital stock or any partnership interests outstanding on or after the Effective
Date (or any options or warrants issued by such Person with respect to its
capital stock), or set aside any funds for any of the foregoing purposes, or
shall have permitted any of its Subsidiaries to purchase or otherwise acquire
for a consideration any shares of any class of the capital stock or any
partnership interests of such Person outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock). Without limiting the foregoing, "Dividends" with respect to any Person
shall also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes, in each case except to the extent the payments described in this
sentence are booked as an expense which reduces Consolidated Net Income.
"Documents" shall mean the Credit Documents, the Canadian Acquisition
Documents and the Recapitalization Documents.
"$ Base Rate Loan" shall mean each Loan designated or deemed
designated as such by the Company at the time of the incurrence thereof or
conversion thereto, including each Swingline Loan.
"Dollar Equivalent Amount" shall mean with respect to (i) any amount
of Canadian Dollars on any date, the equivalent amount in Dollars of such amount
of Canadian Dollars, as determined by the Administrative Agent using the
Exchange Rate and (ii) any amount in Dollars, such amount.
"$ Eurodollar Loans" shall mean Eurodollar Loans denominated in
Dollars.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Drawing" shall have the meaning provided in Section 2.05.
"Effective Date" shall have the meaning provided in Section 14.10.
"Eligible Transferee" shall mean, with respect to any Bank party to
this Agreement on the date hereof or that becomes a Bank pursuant to Sections
1.13 or 14.04, a commercial bank, financial institution or other "accredited
investor" as defined in Regulation D of the Securities Act.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations, orders or proceedings
relating in any way to any Environmental Law (hereafter "Claims") or any permit
issued under any
66
such law, including, without limitation, (a) any and all Claims
by governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgement relating to the environment, employee health
and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA;
the Federal Water Pollution Control Act, 33 U.S.C. (S) 2601 et seq., the Clean
-- ---
Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. (S)
-- ---
3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq., the
-- --- -- ---
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. (S)
11001 et seq., the Hazardous Material Transportation Act, 49 U.S.C. (S) 1801 et
-- --- --
seq. and the Occupational Safety and Health Act, 29 U.S.C. (S) 651 et seq. (to
---
the extent it regulates occupational exposure to Hazardous Materials); and any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Company or Subsidiary of the Company or HFS
would be deemed to be a "single employer" (i) within the meaning of Section
414(b),(c), (m) or (o) of the Code or (ii) as a result of the Company, or a
Subsidiary of the Company or HFS being or having been a general partner of such
person.
"Eurodollar Loan" shall mean each Revolving Loan designated as such by
the applicable Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean, with respect to any Currency (a) the
offered quotation to first-class banks in the New York interbank Eurodollar
market by Chase for deposits of amounts of such Currency in immediately
available funds comparable to the outstanding principal amount of the Eurodollar
Loan of Chase with maturities comparable to the Interest Period applicable to
such Eurodollar Loan commencing two Business Days thereafter as of 10:00 A.M.
(New York time) on the date which is two Business Days prior to the commencement
of such Interest Period, divided (and rounded off to the nearest 1/16 of 1% or,
if there is no nearest 1/16 of 1%, to the next highest 1/16 of 1%) by (b) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D); provided, in the event that the Administrative
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Agent has made any determination pursuant to Section 1.10(a)(i) in respect of
Revolving C$ Loans, the Eurodollar Rate for Revolving C$ Loans determined
pursuant to clause (a) of this definition shall instead be the rate determined
by Chase as the all-in cost of funds for Chase to fund such Revolving C$ Loan
with maturities comparable to the Interest Period applicable thereto.
"Event of Default" shall have the meaning provided in Section 11.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Adjusted Consolidated EBITDA of the Borrower for such period and
(ii) the decrease, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such period, minus (b) the sum of (i) the amount of
Capital Expenditures made by the Borrower and its Wholly-Owned Subsidiaries
during such period plus, without duplication, the Borrower's Allocable Share of
Capital Expenditures made by Joint Ventures during such period (but excluding
Capital Expenditures (x) financed with the proceeds of Indebtedness or equity or
with the proceeds of Asset Sales or (y) made pursuant to the last sentence of
Section 10.07(a) or pursuant to Section 10.07(b) or
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(c)), (ii) the aggregate amount of permanent principal payments of Indebtedness
for borrowed money of the Borrower and its Wholly-Owned Subsidiaries (but
excluding payments pursuant to the Refinancing and repayments of Loans, provided
--------
that repayments of Loans shall be deducted in determining Excess Cash Flow if
such repayments were (A) required as a result of a Scheduled Commitment
Reduction under Section 3.03(b) (but not as a reduction to the amount of
Scheduled Commitment Reductions pursuant to another provision of this Agreement)
or (B) made as a voluntary prepayment pursuant to Section 4.01(a) with
internally generated funds during such period (but only to the extent
accompanied by a voluntary reduction to the Total Revolving Loan Commitment
pursuant to Section 3.02(a)), (iii) the amount of Consolidated Interest Expense
(excluding payments of dividends in respect of Redeemable Capital Stock)
actually paid in cash during such period, (iv) the amount of cash taxes actually
paid during such period (excluding cash taxes which must be paid, or reimbursed
to the Borrower or its Wholly-Owned Subsidiaries, by one or more Unrestricted
Subsidiaries, whether pursuant to the Unrestricted Subsidiary Tax Sharing
Agreements or otherwise) and (v) the increase, if any, in Adjusted Consolidated
Working Capital from the first day to the last day of such period (excluding any
increase attributable to the receipt of proceeds of Capital Stock).
"Excess Termination Fees" shall mean, with respect to any HFS
Franchise Agreement entered into in connection with any Hotel Property existing
on the Initial Borrowing Date, any Termination Fee payable pursuant to such HFS
Franchise Agreement in excess of 2% of the total gross revenues for the
respective Hotel Property for the immediately preceding twelve month period in
respect of which such Termination Fee is paid. It is acknowledged and agreed
that Excess Termination Fees shall not be payable in connection with Hotel
Properties acquired after the Initial Borrowing Date, unless expressly consented
to by the Required Banks.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
"Exchange Rate" shall mean, with respect to Canadian Dollars on any
date, the rate at which such Canadian Dollars may be exchanged into Dollars, as
set forth on such date on the relevant Reuters currency page at or about 11:00
A.M. New York City time on such date. In the event that such rate does not
appear on any Reuters currency page, the "Exchange Rate" with respect to such
Canadian Dollars shall be determined by reference to such other publicly
available service for displaying exchange rates as may be agreed upon by the
Administrative Agent and the Company or, in the absence of such agreement, such
"Exchange Rate" shall instead be the Administrative Agent's spot rate of
exchange in the interbank market where its foreign currency exchange operations
in respect of such Foreign Currency are then being conducted, at or about 10:00
A.M., local time, at such date for the purchase of Dollars with such Canadian
Dollars, for delivery two Business Days later; provided that if at the time of
--------
any such determination, no such spot rate can reasonably be quoted, the
Administrative Agent may use any reasonable method as it deems applicable to
determine such rate, and such determination shall be conclusive absent manifest
error (without prejudice to the determination of the reasonableness of such
method).
"Existing Indebtedness" shall have the meaning provided in Section
8.22.
"Existing Investment Agreements" shall mean all agreements evidencing,
or relating to, any Existing Investments (including all Joint Ventures).
"Existing Investments" shall have the meaning provided in Section
10.05(vii).
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
68
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"FHI" shall mean Forte Hotels, Inc., a Delaware corporation, which has
changed its name to NL Hotels, Inc.
"Final Maturity Date" shall mean August 28, 2002.
"Financing Agreement" shall mean the Amended and Restated Financing
Agreement, dated as of July 24, 1996, between the Company and HFS.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Company or any one or
more of its Subsidiaries primarily for the benefit of employees of the Company
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Franchise Agreement" shall mean (i) with respect to any Hotel
Property in which HFS is the franchisor, an HFS Franchise Agreement and (ii)
with respect to any other Hotel Property, a franchise agreement that the
respective franchisor customarily uses with respect to similarly situated
franchises.
"FSNL" shall mean FSNL LLC, a Connecticut limited liability company.
"Gaming Assets" shall mean the gambling, casino, riverboat and other
gaming assets of the Company and its Subsidiaries owned on the Initial Borrowing
Date.
"Guarantor" shall mean HFS, the Company and each Subsidiary Guarantor.
"Guarantor Event of Default" shall have the meaning provided in the
HFS Guaranty.
"Guaranty" shall mean the HFS Guaranty and the Subsidiaries Guaranty.
"Guaranty Amount" shall mean the amount of the HFS Guaranty then in
effect.
"Guaranty Fee" shall have the meaning provided in Section 10.06(ix).
"Guaranty Inclusion Amount" at any date shall mean the product of (i)
.5 and (ii) the aggregate amount of all obligations supported by guarantees made
by the Company pursuant to clause (xi) of Section 10.04.
"Hazardous Materials" shall mean (a) oil as defined by the Oil
Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq., (b) any petrochemical or
-- ----
petroleum products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; and (b) any chemicals, materials or substances defined
as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "restricted hazardous materials," "extremely hazardous
wastes," "restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect under any applicable Environmental Law.
"HFS" shall mean HFS Incorporated, a Delaware corporation.
"HFS Agreements" shall mean the Financing Agreement, the Corporate
Services Agreement and all HFS Franchise Agreements, as well as any other
agreements of the Borrower and any of its Subsidiaries with HFS or any of its
Subsidiaries.
69
"HFS Franchise Agreement" shall mean a Travelodge license agreement in
the form of Exhibit L-1 or such other form of Travelodge license agreement which
at the time is in substantially the same form as is then being offered by HFS or
a Subsidiary thereof in the then current form of Uniform Franchise Offering
Circular for Travelodge license agreements, or a Ramada Plaza license agreement
in the form of Exhibit L-2, or a license agreement for any HFS affiliated hotel
or motel franchise system substantially in the form then being offered to
prospective licensees in the then current Uniform Franchise Offering Circular
for the applicable HFS affiliated franchise system.
"HFS Guaranty" shall have the meaning provided in Section 5.08.
"HFS Master License Agreement" shall mean the License Agreement, dated
as of January 23, 1996, between Bear Acquisition Corp. (which is a Subsidiary of
HFS) and FHI.
"HFS Subordinated Indebtedness" shall have the meaning provided in
Section 10.04.
"HFS Subordinated Note" shall have the meaning provided in Section
10.04.
"HFS Subordination Agreement" shall have the meaning provided in
Section 5.16.
"Hotel Property" shall mean each hotel or motel owned or leased by the
Company or any of its Subsidiaries or Joint Ventures (including the furniture,
fixtures and equipment thereon).
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services (but excluding accrued expenses and current trade accounts payable
incurred in the ordinary course of business), (ii) the maximum amount available
to be drawn under all letters of credit issued for the account of such Person
and all unpaid drawings in respect of such letters of credit, (iii) all
Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi), (vii)
or (viii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (iv)
the aggregate amount required to be capitalized under leases under which such
Person is the lessee, (v) all obligations of such person to pay a specified
purchase price for goods or services, whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations of
such Person, (vii) all obligations under any Interest Protection Agreement or
Other Hedging Agreement or under any similar type of agreement or arrangement
and (viii) all Redeemable Capital Stock and, without duplication, any Chartwell
Preferred Stock of such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends.
For purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Redeemable Capital Stock as if such
Redeemable Capital Stock were purchased on any date on which Indebtedness shall
be required to be determined pursuant to this Agreement and, if such price is
based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the Company. Notwithstanding and without duplication of the
foregoing, Indebtedness shall include the Guaranty Inclusion Amount from time to
time.
"Information Package" shall mean, with respect to each Hotel Property,
in an information package consisting of (i) a description of the respective
Hotel Property, (ii) management's discussion and analysis of the respective
Hotel Property and discussing any improvements or changes to be made with
respect thereto, (iii) historical financial statements (which may be unaudited)
for the respective Hotel Property for at least the two full fiscal years most
recently ended and the latest 12-month period ended with the last day of the
fiscal quarter last ended, (iv) projections for the respective Hotel Property
for the four years after the respective acquisition and (v) any other
information which the Company determines should be furnished so that the
Information Package for the respective Hotel Property is true and correct in all
material respects and is not incomplete by omitting to state any fact necessary
to make the information (taken as a whole) contained therein not misleading in
any material respect, which Information Package shall include an officer's
certificate of the Company certifying (i) the cost to acquire the respective
Hotel Property, (ii) the purchase of related working capital in connection with
the acquisition of such Hotel Property, (iii) the amount expected to be used to
pay fees and expenses in connection
70
with the acquisition of the respective Hotel Property, and (iv) the amount
anticipated to be spent within one year after the date of the acquisition of the
respective Hotel Property to pay preopening costs and to make improvements of
the respective Hotel Property so acquired.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Revolving Loans hereunder
occurs.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Expense" shall mean, with respect to any Joint Venture, the
total interest expense of such Joint Venture for such period, adjusted by (x)
excluding any interest expense owing to the Company or one or more of its
Wholly-Owned Subsidiaries and (y) including as interest expense any accrued
dividends payable on any Redeemable Capital Stock of such Joint Venture.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement, interest rate floor agreement or other similar agreement
or arrangement.
"Investment" shall have the meaning provided in Section 10.05.
"Investment Commitment" shall have the meaning provided in Section
10.05.
"Issuing Bank" shall mean Chase or any of its Affiliates or BNS or any
of its Affiliates, in its capacity as issuer of a Letter of Credit.
"Joint Venture" shall mean any Person (other than an Unrestricted
Subsidiary) in which the Company or any Subsidiary of the Company owns, directly
or indirectly (except through one or more Unrestricted Subsidiaries), more than
5% but less than 100% of the voting or equity interests or in which the Company
or a Subsidiary of the Company has general partnership liability.
"Joint Venture Agreement" shall mean each partnership agreement, other
organizational agreement or agreement governing the management or ownership of a
Joint Venture.
"Las Vegas Lease" shall have the meaning provided in Section
10.04(xv).
"L/C Supportable Indebtedness" shall mean obligations of the Company
or any of its Subsidiaries or Joint Ventures incurred in the ordinary course of
business permitted to exist pursuant to this Agreement, including obligations
under the Bank of America Facility.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
71
"Licensing Fee" shall mean the licensing fees paid pursuant to the HFS
Master License Agreement, which Licensing Fee is generally based on up to 4.5%
of revenues of the respective Hotel Property.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other) or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loans" shall mean the Revolving Loans and the Swingline Loans.
"Management Agreements" shall mean all agreements with members of, or
with respect to, the management of the Borrower or any of its Subsidiaries, any
of the Joint Ventures or any Hotel Properties.
"Mandatory Borrowing" shall have the meaning specified in Section
1.01(b).
"Marketing and Reservation Fee" shall mean the separate fee or payment
to cover the marketing and reservation services referred to in the respective
HFS Franchise Agreement, which Marketing and Reservation Fee is generally based
on up to 4.5% of revenues of the respective Hotel Property.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Joint Venture" shall mean (i) any Non-Subsidiary Joint
Venture that at any time of determination has contributed in excess of $150,000
to the Company's Consolidated EBITDA for the Test Period then most recently
ended and (ii) each other Non-Subsidiary Joint Venture designated by the Company
in writing to the Administrative Agent as a Material Joint Venture, provided
--------
that in any event at all time at least the 25 Non-Subsidiary Joint Ventures
which had the largest contribution to the Company's Consolidated EBITDA for the
Test Period then most recently ended shall be deemed to be Material Joint
Ventures provided further that, in addition, (a) each Joint Venture which has
-------- -------
obligations which are recourse to the Company or any of its Subsidiaries or
other Joint Ventures shall be a Material Joint Venture and (b) each Joint
Venture which is or becomes a Material Joint Venture shall continue to be a
Material Joint Venture notwithstanding that it no longer satisfies the tests
specified above.
"Maximum Guaranteed Amount" shall have the meaning provided in the HFS
Guaranty.
"Mexican Investment" shall mean the investment by the Company and its
Subsidiaries of up to $10,000,000 in the aggregate to form a joint venture for
the purpose of developing and operating, or franchising others to operate,
lodging facilities in Mexico under the "Travelodge" and "Thriftlodge"
tradenames, as described in the Memorandum of Understanding with Grupo Piasa, a
Mexican hotel company, as in effect on the date hereof, provided that there
--------
shall be no partner, member or investor in such joint venture other than those
that exist on the date hereof.
"Minimum Facing Fee" shall have the meaning provided in Section
3.01(c).
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Net Cash Proceeds" shall mean, with (i) respect to any Asset Sale,
the Cash Proceeds resulting therefrom net of (x) cash expenses of sale
(including, without limitation, brokerage and attorneys' fees, if any, and
payment of principal, premium and interest of Indebtedness other than the Loans
required to be repaid as a result of such Asset Sale) and (y) incremental taxes
paid or payable as a result thereof and (ii) with respect to any issuance of
debt or equity, the Cash Proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from such event, net of transaction costs
(including, as applicable, any underwriting, brokerage or other customary
commissions and reasonable legal and other fees and expenses associated
therewith) incurred in connection therewith.
72
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Non-Subsidiary Joint Venture" shall mean any Joint Venture of the
Company that is not also a Subsidiary of the Company.
"Notes" shall mean the Revolving Notes and the Swingline Notes.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx Xxxxxxx, or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent or any Bank pursuant to the terms of this Agreement
or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04.
"Payment Office" shall mean the office of the Administrative Agent
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office as
the Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of such
Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time, provided that if the Percentage of any Bank is to be
--------
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Hotel Acquisition" shall mean an acquisition of a Hotel
Property (or the equity interest of the Person owning such Hotel Property)
pursuant to Sections 10.02(ix) and/or 10.05(viii).
"Permitted Liens" shall have the meaning provided in Section 10.01.
"Permitted Subordinated Indebtedness" shall mean Indebtedness of the
Company permitted under clause (x) of Section 10.04.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of), the Company or a Subsidiary of the
Company or an ERISA Affiliate, and each such plan for the five-year period
immediately following the latest date on which, the Company or a Subsidiary of
the Company or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
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"Pledge Agreement" shall have the meaning provided in Section 6.09.
"Pledged Securities" shall have the meaning provided in the Pledge
Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which Chase announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Chase may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, with respect to any Permitted Hotel
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Acquisition or the incurrence of any Permitted Subordinated Indebtedness, the
calculation of the consolidated results of the Company and its Subsidiaries
otherwise determined in accordance with this Agreement as if the respective
Permitted Hotel Acquisition or Permitted Subordinated Indebtedness (and all
Indebtedness incurred or Permitted Hotel Acquisitions effected during the
respective Calculation Period or thereafter and on or prior to the date of
determination) (each such date, a "Determination Date") had been effected or
incurred on the first day of the respective Calculation Period; provided that
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all such calculations shall take into account the following assumptions:
(i) except as provided in following clause (ii), pro forma
--- -----
effect shall be given to (1) any Indebtedness incurred subsequent to the
end of the Calculation Period and prior to the date of determination, (2)
any Indebtedness incurred during such period to the extent such
Indebtedness is outstanding at the date of determination and (3) any
Indebtedness to be incurred on the date of determination, in each case as
if such Indebtedness had been incurred on the first day of such Calculation
Period and after giving effect to the application of the proceeds thereof;
(ii) in calculating interest expense attributable to Loans, it
shall be assumed that (x) the average principal amount of Loans actually
outstanding during the Calculation Period (or, if the Initial Borrowing
Date occurs after the first day of the Calculation Period, during the
period from the Initial Borrowing Date to the respective Determination
Date) had been outstanding at all times during the period from the first
day of the Calculation Date until the Determination Date and (y) in
addition to the outstandings as calculated pursuant to preceding clause
(x), to the extent that any Loans were incurred during the Calculation
Period or thereafter but on or prior to the date of determination to
finance Permitted Hotel Acquisitions, such Loans will be deemed to have
been outstanding from the first day of the respective Calculation Period
until the date of the incurrence thereof (or if earlier, the last day of
the respective Calculation Period);
(iii) interest expense attributable to interest on any
Indebtedness (whether existing or being incurred) bearing a floating
interest rate shall be computed as if the rate in effect on the date of
computation (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection Agreement
has a remaining term in excess of 12 months) had been the applicable rate
for the entire period;
(iv) except as provided in preceding clause (ii), there shall be
excluded from interest expense any interest expense related to any amount
of Indebtedness that was outstanding during such Calculation Period or
thereafter but that is not outstanding or is to be permanently repaid on
the date of determination; and
(v) pro forma effect shall be given to all sales of Hotel
--- -----
Properties and Permitted Hotel Acquisitions (by excluding or including, as
the case may be, the historical financial results for the respective Hotel
Properties) that occur during such Calculation Period or thereafter and on
or prior to the Determination Date (including any Indebtedness assumed or
acquired in connection therewith) as if they had occurred on the first day
of such Calculation Period.
74
"Projections" shall have the meaning provided in Section 5.12(b).
"Qualified Capital Stock" of any Person shall mean all Capital Stock
of such Person which is not Redeemable Capital Stock.
"Qualified Equity Commitment" shall have the meaning provided in
Section 10.05.
"Qualified Equity Investment" shall mean any equity investment made by
HFS in the Company (including in return for Redeemable Capital Stock issued as
permitted by Section 10.04(viii) and/or Qualified Capital Stock of the Company)
so long as 100% of the Net Cash Proceeds thereof are actually used by the
Company to make mandatory repayments of Loans as a result of a reduction to the
Total Revolving Loan Commitment pursuant to Sections 3.03(e) and/or (f).
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
-- ---
"Real Estate Committee" shall mean Chase and The Bank of Nova Scotia.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recapitalization" shall mean collectively (i) the Refinancing and
(ii) the receipt by the Company of at least $57,000,000 from the issuance of its
common stock as described in Section 5.17.
"Recapitalization Documents" shall mean collectively (i) the
Refinancing Documents and (ii) the Chartwell Stock Purchase Agreement.
"Recovery Event" shall mean the receipt by the Company or any of its
Subsidiaries or Joint Ventures of any cash insurance proceeds (other than from
business interruption insurance) or condemnation award payable (i) by reason of
theft, loss, physical destruction, damage or taking or any other similar event
with respect to any property or assets of the Company or any of its Subsidiaries
or Joint Ventures and (ii) under any policy of insurance required to be
maintained under Section 9.03.
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or otherwise, is or upon the happening of any event of passage of time would be,
required to be redeemed or repurchased, or is redeemable or required to be
repurchased at the option of the holder thereof, or is convertible into or
exchangeable for debt securities at any time (unless solely at the option of the
Company).
"Refinancing" shall have the meaning provided in Section 5.06.
"Refinancing Documents" shall have the meaning provided in Section
5.06.
"Register" shall have the meaning provided in Section 14.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
75
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Reinvestment Amount" shall mean the aggregate amount of Net Cash
Proceeds received from Asset Sales which would have been required to be applied
in accordance with Section 3.03(d) (absent clause (ii) of the first proviso to
such Section 3.03(d)), but which have not been applied to reduce the Total
Revolving Loan Commitment pursuant to Section 3.03(d) because the Company has
elected to reinvest such Net Cash Proceeds pursuant to clause (ii) of the first
proviso of such Section 3.03(d), with the Reinvestment Amount to be reduced on
each date on which, and in the amount by which, such Net Cash Proceeds have been
reinvested as provided in clause (ii) of the first proviso of such Section
3.03(d) or have been applied to reduce the Total Revolving Loan Commitment
pursuant to the second proviso of such Section 3.03(d).
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Revolving Loan Commitments (or after the termination thereof, the
Dollar Equivalent Amount of outstanding Loans and Adjusted Percentage of Letter
of Credit Outstandings) represent an amount greater than 50% of the Adjusted
Total Revolving Loan Commitment (or after the termination thereof, the sum of
the then Dollar Equivalent Amount of total outstanding Loans of Non-Defaulting
Banks and the aggregate Adjusted Percentages of all Non-Defaulting Banks of the
total Letter of Credit Outstandings at such time). If any Affiliate of the
Company (other than any Person that would qualify as an Affiliate of the Company
solely by reason of its status as a creditor of the Company or any Affiliate
thereof or by the exercise of any remedies under the Security Documents) holds
any Loans or Revolving Loan Commitments, then, unless such Affiliates own 100%
of all outstanding Loans and Revolving Loan Commitments, (x) no such Affiliate
shall be included as a Bank for purposes of this definition and (y) the amount
of such Loans or Revolving Loan Commitments shall be subtracted from the total
amounts of such Loan or Revolving Loan Commitments based on which the
calculation of Required Banks is made.
"Residual Excess Cash Flow" shall mean, for any fiscal year of the
Company, Excess Cash Flow for such fiscal year less the aggregate amount of
payments of fees made with respect to such fiscal year as permitted by Section
10.06(vii).
"Restricted Payment" shall mean (a) any authorization, declaration or
payment of any Dividends with respect to the Company or any of its Subsidiaries
or Joint Ventures, (b) the making (or the giving of any notice in respect
thereof) by the Company or any of its Subsidiaries or Joint Ventures of any
voluntary or mandatory payment, purchase, acquisition or redemption, whether by
the making of any payments of the principal, interest or otherwise, in respect
of any loan, advance or extension of credit made to the Company or any of its
Subsidiaries or Joint Ventures by, or in respect of any guarantee or Contingent
Obligation made for the benefit of the Company or any of its Subsidiaries or
Joint Ventures by, or in respect of any other obligation of the Company or any
of its Subsidiaries or Joint Ventures owed to, any Affiliate of the Company
(excluding the Company and its Wholly-Owned Subsidiaries) and (c) the payment of
any fees or expenses (including the
76
reimbursement thereof by the Company or any of its Subsidiaries or Joint
Ventures) to any Affiliate of the Company (excluding the Company and its Wholly-
Owned Subsidiaries), it being understood that, in any event, any payment on or
in respect of, any Chartwell Preferred Stock/Subordinated Debt, any HFS
Subordinated Indebtedness or any Permitted Subordinated Indebtedness shall be a
Restricted Payment.
"Returns" shall have the meaning provided in Section 8.09.
"Revolving C$ Loan Commitment" shall mean for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Revolving C$ Loan Commitment," as the same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03 and/or 11 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.13
or 14.04(b). The Revolving C$ Loan Commitment of a Bank shall be a subfacility
of the Revolving Loan Commitment of such Bank.
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I directly below the column entitled
"Revolving Loan Commitment," as the same may be (x) reduced from time to time
pursuant to Sections 3.02, 3.03 and/or 11 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to 1.13 or 14.04(b).
"Revolving Loans" shall be the collective reference to Revolving $
Loans and Revolving C$ Loans.
"Revolving $ Loans" shall have the meaning provided in Section 1.01.
"Revolving C$ Loans" shall have the meaning provided in Section 1.01.
"Revolving C$ Note" and "Revolving C$ Notes" shall have the meanings
provided in Section 1.05(b).
"Revolving $ Note" and "Revolving $ Notes" shall have the meanings
provided in Section 1.05(a).
"Revolving Notes" shall mean the collective reference to the Revolving
C$ Notes and the Revolving $ Notes.
"S&P" shall mean Standard & Poor's Ratings Group.
"Scheduled Commitment Reduction" shall have the meaning provided in
Section 3.03(b).
"Scheduled Commitment Reduction Date" shall have the meaning provided
in Section 3.03(b).
"SEC" shall have the meaning provided in Section 9.01(h).
"Security Agreement" shall have the meaning provided in Section 6.07.
"Security Documents" shall be the collective reference to the Pledge
Agreement and the Security Agreement.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning provided in the respective
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
77
"Shareholders' Agreements" shall mean all agreements entered into by
the Borrower or any of its Subsidiaries governing the terms and relative rights
of its capital stock and any agreement entered into by shareholders relating to
any such entity with respect to its capital stock.
"Specified Existing Investments" shall mean those Existing Investments
that relate to the Company's previous gaming businesses and designated as such
on Schedule IX.
"Standard Termination Fee" shall mean (x) with respect to any HFS
Franchise Agreement entered into in connection with any Hotel Property existing
on the Initial Borrowing Date, any Termination Fee payable pursuant to such HFS
Franchise Agreement up to 2% of the total gross revenues for the respective
Hotel Property for the immediately preceding twelve month period in respect of
which such Termination Fee is paid and (y) with respect to any HFS Franchise
Agreement entered into in connection with any Hotel Property acquired after the
Initial Borrowing Date, that portion of the Termination Fee with respect to such
Hotel Property which equals that amount customarily charged by HFS to other
similarly situated franchisees.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.08.
"Subsidiary" shall mean, as to any Person, (i) any corporation 50% or
more of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has a 50% or greater equity interest at the time. Notwithstanding
the foregoing (and except for purposes of the definition of Unrestricted
Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not to
be a Subsidiary of the Company or any of its other Subsidiaries for purposes of
this Agreement. Unless the context otherwise requires, all references herein to
"Subsidiaries" shall be to Subsidiaries of the Company.
"Subsidiary Guarantor" shall mean each Wholly-Owned Domestic
Subsidiary of the Company.
"Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement if
the percentage "50%" contained therein were changed to "66-2/3%."
"Swingline Commitment" shall mean $5,000,000.
"Swingline Expiry Date" shall mean the date which is one Business Day
prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning specified in Section 1.01(b).
"Swingline Note" shall have the meaning specified in Section 1.05(a).
"Syndication Agent" shall mean The Bank of Nova Scotia, in its
capacity as Syndication Agent for the Banks hereunder.
"Tax Sharing Agreements" shall mean all tax sharing, tax allocation
and other similar agreements entered into by the Borrower or any of its
Subsidiaries.
"Taxes" shall have the meaning provided in Section 4.04(a).
78
"Termination Fee" shall mean any fees (whether in the form of
liquidated damages or otherwise) that is due and payable by the Company or any
of its Subsidiaries or Joint Ventures to HFS pursuant to Section Paragraph 30(k)
an existing HFS Franchise Agreement or the equivalent section of any other HFS
Franchise Agreement.
"Test Period" shall mean each period of four consecutive fiscal
quarters of the Company (or, if shorter, the period beginning on July 1, 1996
and ending on the last day of a fiscal quarter of the Company ended after the
Initial Borrowing Date), in each case taken as one accounting period, ended
after the Initial Borrowing Date.
"Total Hotel Revenues" shall mean, for any period, the sum of (i) the
gross total revenues of all wholly-owned Hotel Properties owned or leased by the
Company and its Wholly-Owned Subsidiaries plus (ii) the Company's Allocable
Share of the gross total revenues of all non-wholly-owned Hotel Properties owned
or leased by the Company and its Subsidiaries and Joint Ventures plus (iii) the
Company's Allocable Share of the gross total revenues from the retail operations
at the Fisherman's Wharf Travelodge located in San Francisco, it being
understood that Total Hotel Revenues shall include results of operations of
Hotel Properties only for periods after the acquisition thereof by the Company
or the respective Subsidiary or Joint Venture.
"Total Leverage Ratio" shall mean, at any time, the ratio of (x)
Consolidated Debt at such time to (y) Adjusted Consolidated EBITDA of the
Company for the Test Period then last ended, provided that (i) for purposes of
--------
calculating the Total Leverage Ratio for the Test Period ending on (a) December
31, 1996, Adjusted Consolidated EBITDA of the Company shall be the Adjusted
Consolidated EBITDA of the Company for such Test Period divided by 45%, (b)
March 31, 1997, Adjusted Consolidated EBITDA of the Company shall be the
Adjusted Consolidated EBITDA of the Company for such Test Period divided by 55%
and (c) June 30, 1997, Adjusted Consolidated EBITDA of the Company shall be the
Adjusted Consolidated EBITDA of the Company for such Test Period divided by 85%,
(ii) for purposes of calculating Consolidated Debt at any time, any outstanding
principal amount of Indebtedness under the Bank of America Facility shall be
included and the amount of any Letter of Credit supporting payment of the Bank
of America Facility shall be excluded and (iii) any non-cash write-offs with
respect to the Gaming Assets shall be excluded in determining the Total Leverage
Ratio.
"Total Outstandings" at any time shall mean the sum of the aggregate
principal amount of the Dollar Equivalent Amount of Loans then outstanding plus
the aggregate amount of Letter of Credit Outstandings at such time.
"Total C$ Revolving Loan Commitment" shall mean, at any time, the sum
of the Revolving C$ Loan Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
"Total Unrestricted Subsidiary Leverage Ratio" shall mean, at any
time, the ratio of (x) all Indebtedness of all Unrestricted Subsidiaries at such
time as would be required to be reflected on the liability side of a balance
sheet as prepared in accordance with generally accepted accounting principles
and as determined on a consolidated basis plus, without duplication, the amount
of all Redeemable Capital Stock of all Unrestricted Subsidiaries (determined in
accordance with the definition of Indebtedness contained herein) to (y) Adjusted
Consolidated EBITDA of all Unrestricted Subsidiaries (calculated by using the
Adjusted Consolidated EBITDA of the parent Unrestricted Subsidiary or, if more
than one Unrestricted Subsidiary is directly owned by the Company or a Wholly-
Owned Domestic Subsidiary thereof, by calculating the Adjusted Consolidated
EBITDA of the Unrestricted Subsidiaries on a combined basis) for the Test Period
then last ended.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment, less (y) the sum of the Dollar Equivalent Amount of the aggregate
principal amount of Loans outstanding plus the then aggregate amount of Letter
of Credit Outstandings.
79
"Transaction" shall mean the Canadian Acquisition and the
Recapitalization.
"Type" shall mean the type of Revolving Loan determined with regard to
the interest option applicable thereto, i.e., whether a $ Base Rate Loan, a $
----
Eurodollar Loan or a C$ Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section 2.05.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Company
created or acquired after the Initial Borrowing Date that, at the time of such
creation or acquisition, shall be an Unrestricted Subsidiary (as designated by
the Company, as provided below) provided that such Subsidiary does not and shall
--------
not engage, to any substantial extent, in any line or lines of business activity
other than as provided in Section 10.15.
The Company may designate any such Person to be an Unrestricted
Subsidiary if (a) no Default or Event of Default is existing or will occur as a
consequence thereof, (b) such Subsidiary, at the time of designation thereof,
has no assets (except assets which could be invested in such Unrestricted
Subsidiary at the time of designation as described in the immediately succeeding
sentence), (c) such Subsidiary does not own any equity interests in, or hold any
Lien on any property of, the Company or any other Subsidiary or Joint Venture of
the Company (excluding other Unrestricted Subsidiaries) and (d) the designation
of the respective Unrestricted Subsidiary shall be made in compliance with any
additional requirements contained in Section 10.16(c) . The only asset that may
be invested in any such Unrestricted Subsidiary by the Company in any of its
other Subsidiaries or Joint Ventures is the Net Cash Proceeds of the Chartwell
Preferred Stock. The Company may designate any Unrestricted Subsidiary to be a
Subsidiary, provided that no Default or Event of Default is existing or will
--------
occur as a consequence thereof and all actions which would be required to be
taken pursuant to Section 10.16(a) in connection with the creation or
acquisition of a new Subsidiary are taken at the time of the respective such
designation. Each such designation shall be evidenced by filing with the
Administrative Agent a certified copy of the resolution giving effect to such
designation and an officers' certificate of an Authorized Officer of the Company
certifying that such designation complied with the foregoing conditions.
"Unrestricted Subsidiary Tax Sharing Agreement" shall mean any tax
sharing agreement entered into by the Company with an Unrestricted Subsidiary
pursuant to the requirements of Section 10.16(c), with the terms and conditions
of any such tax sharing agreement to be required to be in form and substance
satisfactory to the Required Banks, and with any changes thereto made after the
entering into of any such tax sharing agreement to be required to be
satisfactory to the Required Banks.
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less the
sum of (i) the Dollar Equivalent Amount of the aggregate outstanding principal
amount of Revolving Loans made by such Bank and (ii) such Bank's Adjusted
Percentage of the total Letter of Credit Outstandings at such time, provided
--------
that for purposes of Section 3.01(a) outstanding Swingline Loans shall be deemed
not to be outstanding.
"Wholly-Owned Domestic Subsidiary" shall mean any Wholly-Owned
Subsidiary of the Company that is incorporated or organized in the United States
or any state or territory thereof.
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"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 13. The Agents.
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1.131 Appointment. The Banks hereby designate The Chase Manhattan
-----------
Bank as Administrative Agent (for purposes of this Section 13, the term
"Administrative Agent" shall include Chase in its capacity as Collateral Agent
pursuant to the Pledge Agreement) to act as specified herein and in the other
Credit Documents. The Banks hereby designate The Bank of Nova Scotia Bank as
Syndication Agent to act as specified herein and in the other Credit Documents.
Each Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, each Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such other duties hereunder
and thereunder as are specifically delegated to or required of each Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. Each Agent may perform any of its duties hereunder by or through its
respective officers, directors, agents, employees or affiliates.
1.132 Nature of Duties. Neither Agent shall have any duties or
----------------
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. Neither Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross negligence
or willful misconduct. The duties of each Agent shall be mechanical and
administrative in nature; neither Agent shall have by reason of this Agreement
or any other Credit Document a fiduciary relationship in respect of any Bank or
the holder of any Note; and nothing in this Agreement or any other Credit
Document, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.
1.133 Lack of Reliance on the Agents. Independently and without
------------------------------
reliance upon any Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of each of HFS and the
Company and its Subsidiaries and Joint Ventures in connection with the making
and the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of each
of HFS and the Company and its Subsidiaries and Joint Ventures and, except as
expressly provided in this Agreement, neither Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. Neither Agent shall be responsible to any Bank or
the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of HFS or the Company and its Subsidiaries and Joint Ventures or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of HFS or the Company and its Subsidiaries
and Joint Ventures or the existence or possible existence of any Default or
Event of Default.
1.1343 Certain Rights of the Agents. If any Agent shall request
----------------------------
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Banks; and neither Agent shall incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have
81
any right of action whatsoever against either Agent as a result of such Agent
acting or refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
1.135 Reliance. Each Agent shall be entitled to rely, and shall
--------
be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent believed to be the proper Person, and, with respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by such
Agent.
1.136 Indemnification. To the extent any Agent is not reimbursed
---------------
and indemnified by the Company, the Banks will reimburse and indemnify such
Agent, in proportion to their respective "percentages" as used in determining
the Required Banks, for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agent in performing its respective duties hereunder
or under any other Credit Document, in any way relating to or arising out of
this Agreement or any other Credit Document; provided that no Bank shall be
--------
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Agent's gross negligence or willful misconduct.
1.137 The Agents in their Individual Capacities. With respect to
-----------------------------------------
its obligation to make Loans and issue Letters of Credit under this Agreement,
each Agent shall have the rights and powers specified herein for a "Bank" and
may exercise the same rights and powers as though it were not performing the
duties specified herein; and the term "Banks," "Required Banks," "holders of
Revolving Notes", "Issuing Bank" or any similar terms shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity.
Each Agent may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with any Credit Party or any Affiliate
of any Credit Party as if they were not performing the duties specified herein,
and may accept fees and other consideration from the Company or any other Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
1.138 Holders. Each Agent may deem and treat the payee of any
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Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
1.139 Resignation by the Agents. (a) The Administrative Agent
-------------------------
may resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 15 Business Days' prior
written notice to the Company and the Banks, and such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below. The Syndication Agent
may resign from the performance of all of its functions and duties hereunder
and/or under the other Credit Documents at any time by giving written notice
thereof to the Company and the Banks, and such resignation shall take effect
immediately.
(b) Upon any such notice of resignation by the Administrative Agent,
the Required Banks shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Company.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Company (which consent shall not be unreasonably withheld), shall
then appoint a commercial bank or trust company with capital and surplus of not
less than $250,000,000 as successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Banks appoint a successor Administrative Agent as provided above.
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(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Banks shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Required Banks appoint a successor
Administrative Agent as provided above.
SECTION 14. Miscellaneous.
-------------
1.141 Payment of Expenses, etc. The Company shall: (i) whether
------------------------
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of each Agent (including, without limitation,
the reasonable fees and disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
each Agent in connection with its syndication efforts with respect to this
Agreement and of each Agent and, following and during the continuation of an
Event of Default, each of the Banks in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for each Agent and, following and during the
continuation of an Event of Default, for each of the Banks); (ii) pay and hold
each of the Banks harmless from and against any and all present and future
stamp, excise and other similar taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify each Agent and
each Bank, and each of their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Agent or any
Bank is a party thereto) related to the entering into and/or performance of this
Agreement or any other Credit Document or the use of any Letter of Credit or the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the Canadian Acquisition or
the Recapitalization) or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned
or at any time operated by the Company or any of its Subsidiaries, Joint
Ventures or Unrestricted Subsidiaries, the generation, storage, transportation,
handling or disposal of Hazardous Materials at any location, whether or not
owned or operated by the Company or any of its Subsidiaries, Joint Ventures or
Unrestricted Subsidiaries, the non-compliance of any Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including applicable
permits thereunder) applicable to any Real Property, or any Environmental Claim
asserted against the Company or any of its Subsidiaries, Joint Ventures or
Unrestricted Subsidiaries or any Real Property owned or at any time operated by
the Company or any of its Subsidiaries, Joint Ventures or Unrestricted
Subsidiaries (but excluding, in each case, any losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified). To the extent that the
undertaking to indemnify, pay or hold harmless any Agent or any Bank set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Company shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
1.142 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the Company
or any Subsidiary Guarantor or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special, time or demand, provisional or final) and any other
Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches, agencies or affiliates of such Bank wherever located)
to or for the credit or the account of the Company or any Subsidiary Guarantor
against and on account of the Obligations and liabilities of the Company or such
Subsidiary Guarantor to such Bank under this Agreement or
83
under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 14.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
1.143 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Company, at the
Company's address specified opposite its signature below; if to any Bank, at its
address specified opposite its name on Schedule II; and if to the Administrative
Agent, at its Notice Office; or, as to any Credit Party or any Agent, at such
other address as shall be designated by such party in a written notice to the
other parties hereto and, as to each Bank, at such other address as shall be
designated by such Bank in a written notice to the Company and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company, cable
company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to each Agent and the Company
shall not be effective until received by such Agent or the Company, as the case
may be.
1.144 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, no Credit Party may assign
-------- -------
or transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of the Required Banks
(or all Banks in the case of the Company or HFS) and, provided further, that,
----------------
although any Bank may transfer, assign or grant participations in its rights
hereunder, such Bank shall remain a "Bank" for all purposes hereunder (and may
not transfer or assign all or any portion of its Revolving Loan Commitments
hereunder except as provided in Section 14.04(b)) and the transferee, assignee
or participant, as the case may be, shall not constitute a "Bank" hereunder and,
provided further, that no Bank shall transfer or grant any participation under
----------------
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the Final
Maturity Date) in which such participant is participating, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Revolving Loan Commitment shall not constitute a change
in the terms of such participation, and that an increase in the Revolving Loan
Commitment shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by a Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) supporting the Loans
hereunder in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant's rights against such Bank in
respect of such participation to be those set forth in the agreement executed by
such Bank in favor of the participant relating thereto) and all amounts payable
by the Company hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) to its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (y) assign all or, if less
than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Bank or assigning Banks, of such Revolving Loan Commitments (and
related outstanding Obligations) hereunder to one or more Eligible Transferees,
each of which assignees shall become a party to this Agreement as a Bank by
execution of an Assignment and Assumption Agreement, provided that, (i) at such
--------
time Schedule I shall be deemed modified to reflect the Revolving Loan
Commitments and Revolving C$ Loan Commitments of such new Bank and of the
existing Banks, (ii) new Notes will be issued, at the Company's expense, to such
new Bank and to the assigning Bank upon the request of such new Bank or
84
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Revolving Loan Commitments and Revolving C$ Loan Commitments, (iii)
the consent of each of the Administrative Agent, the Company and the Issuing
Bank shall be required in connection with any such assignment pursuant to clause
(y) above (which consent, in each case, shall not be unreasonably withheld) and
(iv) the Administrative Agent shall receive at the time of each such assignment,
from the assigning or assignee Bank, the payment of a non-refundable assignment
fee of $3,500. To the extent of any assignment pursuant to this Section
14.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Revolving Loan Commitment and Revolving C$ Loan
Commitment. At the time of each assignment pursuant to this Section 14.04(b) to
a Person which is not already a Bank hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Bank shall, to the extent legally
entitled to do so, provide to the Company and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Revolving Loan Commitment and
related outstanding Obligations pursuant to Section 1.13 or this Section
14.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the respective
assigning Bank prior to such assignment, then the Company shall not be obligated
to pay such increased costs (although the Company shall be obligated to pay any
other increased costs of the type described above resulting from changes after
the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
(d) The parties hereto acknowledge and agree that HFS has certain
rights to repurchase the Loans and Revolving Loan Commitments in full as
provided in Section 5 of the HFS Subordination Agreement.
(e) Any sale or transfer of a Revolving Loan Commitment by any Bank
shall also constitute a sale or transfer by such Bank of a ratable portion of
its Revolving C$ Loan Commitment.
1.145 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of any Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Company or any other Credit Party, any Agent or any Bank or
the holder of any Note shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of any Agent or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
1.146 Payments Pro Rata. (a) Except as otherwise provided in
-----------------
this Agreement, the Administrative Agent agrees that promptly after its receipt
of each payment from or on behalf of the Company in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
--- ----
pro rata based upon their respective shares, if any, of the Obligations with
--- ----
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker' s lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an
85
interest in the Obligations of the respective Credit Party to such Banks in such
amount as shall result in a proportional participation by all the Banks in such
amount; provided that if all or any portion of such excess amount is thereafter
--------
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 14.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
1.147 Calculations; Computations. (a) The financial statements
--------------------------
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Company to the Banks);
provided that, (i) as provided in the definition of Subsidiary, Unrestricted
--------
Subsidiaries shall not be included for any purposes of this Agreement (including
the computations and calculations described in the immediately succeeding clause
(ii)) as Subsidiaries of the Company, (y) except as otherwise specifically
provided herein, all computations of Excess Cash Flow and the Cumulative
Retained Residual Excess Cash Flow Amount, and all computations determining
compliance with Sections 10.03 and 10.05 through 10.11, inclusive, shall utilize
accounting principles and policies in conformity with those used to prepare the
historical pro forma financial statements delivered to the Banks pursuant to
Section 8.05(a) and (iii) for purposes of determining compliance with Sections
10.10 and 11.12 only, Adjusted Consolidated EBITDA of the Company or the
Unrestricted Subsidiaries, as the case may be, shall be determined giving pro
forma effect to sales and acquisitions of Hotel Properties and Acquired
Businesses on the same basis as is provided in clause (v) of the definition of
Pro Forma Basis contained herein.
--- -----
(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest, Commitment Commission or Fees are payable.
1.148 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
-----------------------------------------------------------
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
----------
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK JURISDICTION OVER SUCH BORROWER, AND AGREES NOT TO PLEAD OR CLAIM,
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT
LACKS JURISDICTION OVER SUCH BORROWER. EACH BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT UNDER THIS AGREEMENT, ANY BANK OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE
86
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(B) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
1.149 Counterparts. This Agreement may be executed in any number
------------
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the Company
and the Administrative Agent.
14.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which each Borrower and each of the Banks shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered the same to the Administrative Agent at its Notice
Office or, in the case of the Banks, shall have given to the Administrative
Agent telephonic (confirmed in writing), written or telex notice (actually
received) at such office that the same has been signed and mailed to it. The
Administrative Agent will give the Company and each Bank prompt written notice
of the occurrence of the Effective Date.
14.11 Headings Descriptive. The headings of the several sections
--------------------
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
14.12 Amendment or Waiver; etc. (a) Neither this Agreement nor
------------------------
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks (or, as contemplated by Section 13(b) of the HFS
Guaranty, by the Agents), provided that no such change, waiver, discharge or
--------
termination shall, without the consent of each Bank (other than a Defaulting
Bank) (with Obligations being directly affected in the case of following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note or extend the
stated maturity of any Letter of Credit beyond the Final Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except to the extent repaid in cash), (ii)
release all or substantially all of the Collateral (except as expressly provided
in the Credit Documents), (iii) release HFS from its payment obligations
pursuant to the HFS Guaranty (except as expressly provided therein), (iv) amend,
modify or waive any provision of this Section 14.12, (v) reduce the percentage
specified in the definition of Required Banks (it being understood that, with
the consent of the Required Banks, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Revolving Loan Commitments are
included on the Effective Date) or (vi) consent to the assignment or transfer by
the Company or HFS of any of its rights and obligations under this Agreement or
the HFS Guaranty, as the case may be; provided further, that no such change,
--------
waiver, discharge or termination shall (v) increase the Revolving Loan
Commitment or Revolving C$ Loan Commitment of any Bank over the amount thereof
then in effect without the consent of such Bank (it being understood that
waivers or modifications of conditions precedent, covenants, Defaults or Events
of Default or of a mandatory reduction in the Total Revolving Loan Commitment or
Total Revolving C$ Loan Commitment shall not constitute an increase of the
Revolving Loan Commitment or Total Revolving C$ Loan Commitment of any Bank, and
that an increase in the available portion of the Revolving Loan Commitment
87
or Revolving C$ Loan Commitment of any Bank shall not constitute an increase in
the Revolving Loan Commitment or Revolving C$ Loan Commitment of such Bank), (w)
without the consent of the Issuing Bank, amend, modify or waive any provision of
Section 2 or alter its rights or obligations with respect to Letters of Credit,
(x) without the consent of the applicable Agent, amend, modify or waive any
provision of Section 13 as same applies to such Agent or any other provision as
same relates to the rights or obligations of such Agent, (y) without the consent
of the Collateral Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Agent or (z) without the consent of the
Supermajority Banks, amend, modify or waive any Scheduled Commitment Reduction.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (vi), inclusive, of the first proviso to Section 14.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Company
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Revolving
Loan Commitment and Revolving C$ Loan Commitment in accordance with Sections
3.02(b) and/or 4.01(b), provided that, unless the Revolving Loan Commitment and
--------
Revolving C$ Loan Commitment terminated and Loans repaid pursuant to preceding
clause (B) are immediately replaced in full at such time through the addition of
new Banks or the increase of the Revolving Loan Commitments and Revolving C$
Loan Commitments of existing Banks (who in each case must specifically consent
thereto), then in the case of any action pursuant to preceding clause (B) the
Required Banks (determined after giving effect to the proposed action) shall
specifically consent thereto, provided further, that in any event the Company
--------
shall not have the right to replace a Bank, terminate its Revolving Loan
Commitment and Revolving C$ Loan Commitment or repay its Loans solely as a
result of the exercise of such Bank's rights (and the withholding of any
required consent by such Bank) pursuant to the second proviso to Section
14.12(a).
(c) It is understood and agreed by the parties hereto that, to the
extent (and only to the extent) expressly provided in Section 2.06 of the HFS
Subordination Agreement, certain amendments to the Credit Agreement shall, to
the extent provided in said Section 2.06, require the consent of HFS.
14.13 Survival. All indemnities set forth herein including,
--------
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall,
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Loans.
14.14 Domicile of Loans. Each Bank may transfer and carry its
-----------------
Loans at, to or for the account of any office, Subsidiary or Affiliate of such
Bank. Notwithstanding anything to the contrary contained herein, to the extent
that a transfer of Loans pursuant to this Section 14.14 would, at the time of
such transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04
from those being charged by the respective Bank prior to such transfer, then the
Company shall not be obligated to pay such increased costs (although the Company
shall be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective transfer).
14.15 Confidentiality. (a) Subject to the provisions of clause
---------------
(b) of this Section 14.15, each Bank agrees that it will not disclose without
the prior consent of the Company (other than to its employees, auditors,
advisors or counsel or to another Bank if the Bank or such Bank's holding or
parent company in its sole discretion determines that any such party should have
access to such information, provided such Persons shall be subject to the
--------
provisions of this Section 14.15 to the same extent as such Bank) any
information with respect to the Company or any of its Subsidiaries which is now
or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by the Company to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
--------
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or
88
their successors, (c) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to such Bank, (e) to any
Agent or the Collateral Agent or any Bank and (f) to any prospective or actual
transferee or participant in connection with any contemplated transfer or
participation of any of the Notes or Revolving Loan Commitments or any interest
therein by such Bank, provided, that such prospective transferee agrees to be
--------
bound by the provisions contained in this Section.
(b) The Company hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Company or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Company and its Subsidiaries),
provided such Persons shall be subject to the provisions of this Section 14.15
--------
to the same extent as such Bank.
14.16 Register. Each Borrower hereby designates the
--------
Administrative Agent to serve as such Borrower's agent, solely for purposes of
this Section 14.16, to maintain a register (the "Register") on which it will
record the Revolving Loan Commitments and Revolving C$ Loan Commitments from
time to time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
a Borrower's obligations in respect of such Loans. With respect to any Bank, the
transfer of the Revolving Loan Commitment and Revolving C$ Loan Commitment of
such Bank and the rights to the principal of, and interest on, any Loan made
pursuant to such Revolving Loan Commitment or Revolving c$ Loan Commitment shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Revolving Loan
Commitment and Revolving C$ Loan Commitment and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Revolving
Loan Commitment and Revolving C$ Loan Commitment and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of the
Revolving Loan Commitment and the Revolving C$ Loan Commitment and the Loans
shall be recorded by the Administrative Agent on the Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 14.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Company agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 14.16 other than those resulting from the Administrative Agent's
willful misconduct or gross negligence.
14.17 Limitation on Additional Amounts, etc. Notwithstanding
-------------------------------------
anything to the contrary contained in Section 1.10, 1.11, 2.06 or 4.04, unless a
Bank gives notice to the Company that it is obligated to pay an amount under any
such Section within 180 days after the later of (x) the date the Bank incurs the
respective increased costs, Taxes, loss, expense or liability, reduction in
amounts received or receivable or reduction in return on capital or (y) the date
such Bank has actual knowledge of its incurrence of the respective increased
costs, Taxes, loss, expense or liability, reductions in amounts received or
receivable or reduction in return on capital, then such Bank shall only be
entitled to be compensated for such amount by the Company pursuant to said
Section 1.10, 1.11, 2.06 or 4.04, as the case may be, to the extent the costs,
Taxes, loss, expense or liability, reduction in amounts received or receivable
or reduction in return on capital are incurred or suffered on or after the date
which occurs 180 days prior to such Bank giving notice to the Company that it is
obligated to pay the respective amounts pursuant to said Section 1.10, 1.11,
2.06 or 4.04, as the case may be. This Section 14.17 shall have no applicability
to any Section of this Agreement other than said Sections 1.10, 1.11, 2.06 and
4.04.
14.18 Certain Provisions Regarding Joint Ventures.
-------------------------------------------
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Default or Event of Default shall arise under Section 11.02 or 11.03 as a result
of any action (or failure to take any action) by any Non-Subsidiary Joint
Venture, or as a result of any event, condition, fact or circumstance with
respect to any Non-Subsidiary Joint Venture, in each case to the extent that
neither the Company nor any of its Subsidiaries have voting or management
control with respect to the affairs of such Non-Subsidiary Joint Venture and
neither the Company nor any such Subsidiary thereof consented to any
89
such action (or failure to act), (ii) neither the Company nor any of its
Subsidiaries will relinquish voting or management control over any Material
Joint Venture in which it has such control other than in connection with the
sale of the Company's or such Subsidiary's entire equity interest in such
Material Joint Venture, (iii) neither the Company nor any of its Subsidiaries
will reduce their ownership interest in any Material Joint Venture in which they
own a greater than 50% interest to an ownership interest of 50% or less in such
Material Joint Venture and (iv) neither the Company nor any of its Subsidiaries
shall consent to any action to be taken by any Joint Venture if such action
would give rise to a Default or an Event of Default hereunder.
14.19 Judgment; Currency. (a) If for the purpose of obtaining
------------------
judgment in any court it is necessary to convert a sum due hereunder in one
Currency into another Currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.
(b) The obligation of a Borrower in respect of any sum due to any
Bank or the Administrative Agent hereunder shall, notwithstanding any judgment
in or receipt of a currency (the "Alternate Currency") other than that in which
------------------
such sum is denominated in accordance with the applicable provisions of this
Agreement or the other Credit Documents (the "Agreement Currency"), be
------------------
discharged only to the extent that on the Business Day following receipt by such
Bank or the Administrative Agent (as the case may be) of any such sum so due in
the Alternate Currency such Bank or the Administrative Agent (as the case may
be) may in accordance with normal banking procedures purchase the Agreement
Currency with the Alternate Currency; if the amount of the Agreement Currency so
purchased is less than the sum originally due to such Bank or the Administrative
Agent (as the case may be) in the Agreement Currency, each Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Bank or the Administrative Agent (as the case may be) against such loss, and if
the amount of the Agreement Currency so purchased exceeds the sum originally due
to any Bank or the Administrative Agent (as the case may be), such Bank or the
Administrative Agent (as the case may be) agrees to remit to the applicable
Borrower such excess.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
000 Xxxxx Xxxxxx CHARTWELL LEISURE INC.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By______________________________________
Attention: Xxxxxxx Xxxxx Title:
Address:
CHARTWELL CANADA CORP.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000 By______________________________________
Telecopier No.: (000) 000-0000 Title:
Attention: Xxxxxxx Xxxxx
THE CHASE MANHATTAN BANK,
Individually and as Administrative
Agent
By______________________________________
Title:
90
00
XXX XXXX XX XXXX XXXXXX,
Individually and as Syndication Agent
By /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Title: Vice-President
BANQUE PARIBAS
By /s/ Xxxxx X. Xxxxxxxxx By /s/ Xxxx X. Xxxxxxxx
-------------------------- ---------------------------
Title: Assistant Vice Title: Group Vice President
President
CIBC, INC.
By /s/ Xxxxxx Xxxxxx
------------------------------
Title: Associate Director
MELLON BANK, N.A.
By /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Vice President
NATIONSBANK, N.A.
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
92
SCHEDULE I
----------
COMMITMENTS
-----------
Revolving Revolving C$
Loan Loan
Bank Commitment Commitment
---- ------------ ----------
The Chase Manhattan Bank $ 34,000,000 C$21,533,334
0
Xxx Xxxx xx Xxxx Xxxxxx $ 34,000,000 C$21,533,334
4
Banque Paribas $ 15,000,000 C$ 9,500,000
CIBC, Inc. $ 25,000,000 C$15,833,333
3
Mellon Bank, N.A. $ 25,000,000 C$15,833,333
3
NationsBank, N.A. $ 17,000,000 C$10,766,666
6
TOTAL: ------------ ------------
$150,000,000 C$95,000,000
0
SCHEDULE II
-----------
BANK ADDRESSES
--------------
The Chase Manhattan Bank 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
with a copy to:
Chase Agent Bank Services
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
The Bank of Nova Scotia Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 or 225-5091
Attention: Xxxxx Xxxxxxxxxx
Banque Paribas 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
CIBC, Inc. 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Mellon Bank, N.A. 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx Xxxxx
NationsBank, N.A. NationsBank NC1-007-20-01
000 X. Xxxxx Xx.
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxx
SCHEDULE III
------------
[INTENTIONALLY OMITTED]
SCHEDULE IV
REAL PROPERTY
-------------
1. National Lodging Corp.
None.
2. Forte Hotels, Inc., Travel Beverages, Inc., FHI.San Diego Inc.
See attached
3. National Gaming Mississippi, Inc.
None.
SCHEDULE IV
REAL PROPERTY
(a) Owned or Leased Real Property
-----------------------------
I. OWNED REAL PROPERTY
A. HOTELS
1. Property: Portland
0000 Xxxxxxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
2. Property: Toronto Canada
55 Hallcrown Place
Toronto, Ontario, Canada M2J R41
3. Property: Houston
0000 Xxxxx Xxxx Xxxxxxx
Xxxxxxx, XX 00000
B. MOTELS
1. Property: Monterey Fairgrounds.Carmel/1/
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
2. Property: Niagara Falls Thriftlodge /2/
000 Xxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
3. Property: Beachwood
0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
4. Property: Greensboro
0000 Xxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
________________________
1. Property is owned by the Company in common with X.X. Xxxxx, an individual,
and leased to a joint venture; see Item 9 under Section II.B of this
Schedule 2.16(a).
2. Property is owned by the Company in common with Xxxxxxx Xxxxx, an
individual, and leased to the Company; see Item 6 under Section II.B of
this Schedule 2.16(a).
-2-
5. Property: Fort Lauderdale
0000 Xxxx Xxxxxxxxxx Xxxx.
Xxxx Xxxxxxxxxx, XX 00000
6. Property: Jacksonville
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
7. Property: Willoughby
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
8. Property: Louisville
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
9. Property: Detroit Novi
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
10. Property: Columbia West
0000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
11. Property: Naperville (Chicago)
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
12. Property: Pelham
000 Xxx Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
13. Property: Cambridge
X-00 & XX-000
Xxxx 000
Xxxxxxxxx, XX 00000
14. Property: Columbus (Worthington)
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
15. Property: Pittsfield
00 Xxxxxxx Xxxx (Xxxxx 0)
Xxxxxxxxxx, XX 00000
-3-
16. Property: Orlando Central Park/3/
0000 Xxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
17. Property: Revelstoke Lodge (Canada)/4/
000 0xx Xx. Xxxx
Xxxxxxxxxx, X.X.
Xxxxxx X0X 250
18. Property: Omak
000 Xxxxx Xxxx Xxxxxx
Xxxx, XX 00000
19. Property: Paso Xxxxxx/5/
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
C. JOINT VENTURE PROPERTIES/6/
1. Property: El Paso City Central/7/
000 Xxxx Xxxxxxxx Xxxxxx
Xx Xxxx, XX 00000
_________________________
3. A portion of this property is leased by the Company to a third party; see
Item 17 under Section II.E. of this Schedule 2.16(a).
4. Property is leased to Travelodge Ltd. and Xxxxxxx Holdings Ltd.; see Item
65 under Section II.C of this Schedule 2.16(a). The Company owns this
property in common with Jubar Holdings.
5. Property is leased to Travelodge International Inc., remote predecessor-in-
interest to Forte Hotels, Inc., et al.; see Item 60 under Section II.C of
-- --
this Schedule 2.16(a).
6. The interests in the "Joint Venture Properties" are held by (1) the Company
in common with other entities or individuals and/or (2) a joint venture (in
which the Company is a venture partner), either singly or in common with
other entities or individuals.
7. An associated "alley" parcel is leased by a third party to the Company and
one individual; see Item 87 under Section II.C of this Schedule 2.16(a).
Also, a portion of this property is leased by the Company to a third party;
see Item 15 under Section II.E of this Schedule 2.16(a).
-4-
2. Property: Santa Xxxx Downtown/8/
College at Mendocino
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
3. Property: Williams/9/
000 Xxxx Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
4. Property: Santa Xxxxxxx Beach/10/
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
5. Property: San Xxxxxxx Xxxxx/11/
000 Xxxxxxxx
Xxx Xxxxxxx, XX 00000
6. Property: Monterey
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
7. Property: San Francisco Central
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
8. Property: Alexandria
0000 XxxXxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
9. Property: Athens Thriftlodge
0000 Xxxxxxx 00 Xxxx
Xxxxxx, XX 00000
10. Property: Chambersburg
000 Xxxxxxx Xxx Xxxx
Xxxxxxxxxxxx, XX 00000
_________________________
8. Property is leased to the Company; see Item 76 under Section II.C of this
Schedule 2.16(a).
9. Property is owned by the Company in common with an individual and is leased
to a joint venture and an individual; see Item 80 under Section II.C of
this Schedule 2.16(a).
10. Property is owned by the joint venture in common with the Company and is
leased to the Company; see Item 83 under Section II.C of this Schedule
2.16(a).
11. A portion of this property is leased by the Company to a third party; see
Item 14 under Section II.E of this Schedule 2.16(a).
-5-
11. Property: Xxxx Xxxx
X-00, Xxxx 0
Xxxx Xxxx, XX 00000
12. Property: Lancaster
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
13. Property: Boise
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
14. Property: Salt Lake Downtown
000 Xxxxx Xxxx Xxxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
15. Property: Roseburg/12/
000 Xxxx Xxxxxxx Xxxx.
Xxxxxxxx, XX 00000
D. UNDEVELOPED PROPERTY
1. Property: Elizabethtown
000 Xxxxxxx Xxxxx Xxxxx
[(a.k.a, X-00 & X.X. 00)]
Xxxxxxxxxxxxx, XX 00000
2. Property: Pooler, GA
Lot #3 on Plot of Pooler
Square Subdivision Phase
Chatham County
_____________________________
12. Property is leased to a joint venture; see Item 66 under Section II.C. of
this Schedule 2.16(a).
-6-
II. LEASED REAL PROPERTY
A. HOTELS/13/
1. Property: Disney World
0000 Xxxxx Xxxxx Xxxx.
(P.O. Xxx 00000)
Xxxx Xxxxx Xxxxx, XX 00000-0000
Lessor: Lake Buena Vista Communities,
Inc./14/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 2/1/71
2. Property: Mt. Laurel
0000 Xx. 00
Xx. Xxxxxx, XX 00000
Lessor: American Real Estate Holdings
Limited Partnership/15/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 4/11/73
3. Property: San Diego Harbor Island
0000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000-0000
Lessor: San Diego Unified Port District
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 11/5/68
4. Property: J.F.K.
J.F.K. International Airport
Van Wyck Expressway
Jamaica, NY 11430-1613
Lessor: Port Authority of New York and New
Jersey
Lessee: Forte Hotels, Inc.
Date of Lease: 12/2/55
_____________________________
13. Unless otherwise indicated, the named lessors and lessees are the lessors
and lessees of record.
14. Fee owner(s) of record.
15. Fee owner(s) of record.
-7-
5. Property: San Francisco Wharf
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Block 14 Associates; Bank of
America National Trust and Savings
Association
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 3/1/61
6. Property: Dallas
0000 Xxxxx Xxxxx Xxxx.
Xxxxxx, XX 00000
Lessor: The Hotel Investors
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 6/25/71
7. Property: Long Beach/16/
000 Xxxxxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Lessor: City of Long Beach
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 5/12/88
____________________________
16. A contract for the sale of this property was executed 12.8.95. See Item 37
on Schedule 2.10.
-8-
B. MOTELS/17/
1. Property: Orlando Centroplex
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Lease 1
-------
Lessor: Individuals/18/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 3/11/57
Lease 2
-------
Lessor: Individuals/19/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 12/23/57
2. Property: Cincinnati Riverfront
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Lessor: The Stille & Duhlmeier Company/20/
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 5/24/66
3. Property: Waukegan Thriftlodge/21/
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Lessor: Individuals/22/
Lessee: Forte Hotels, Inc.
Date of Lease: 8/27/63
_________________________
17. Unless otherwise indicated, the named lessors and lessees are the lessors
and lessees of record.
18. Fee owner(s) of record.
19. Fee owner(s) of record.
20. Fee owner(s) of record.
21. A portion of this property is leased by the Company to a third party; see
Item 16 under Section II.E of this Schedule 2.16(a).
22. Fee owner(s) of record.
-9-
4. Property: York
000-000 Xxxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
Lessor: Xxxxxx & Xxxxxx Xxxxx
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 12/18/62
5. Property: Tallahassee/23/
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Lessor: Lively Sisters, Ltd.; X.X.
Xxxxxx/24/
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 9/20/61
6. Property: Niagara Falls Thriftlodge
000 Xxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Lessor: Forte Hotels, Inc.; Xxxxxxx
Xxxxx/25/
Lessee: Travelodge International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.
Date of Lease: 9/10/63
7. Property: San Francisco International Airport
000 Xxxxx Xxxxxxx Xxxx.
Xxxxx Xxx Xxxxxxxxx, XX 00000
Lessor: International Inn, Inc./26/
Lessee: Forte Hotels, Inc.
_____________________________
23. The landlords of the Tallahassee Travelodge property recently brought suit
alleging a loss of percentage rent due to the poor maintenance of the
hotel. In a May 1995 trial, the jury awarded damages to the plaintiffs for
lost rent and the court, in the bench portion of the trial, terminated the
lease. The Company has paid the damages in full and appealed the order
terminating the lease. The Company is currently in settlement negotiations
with the landlords. See Wilson v. FHI listed as Item 13 on Annex A.II of
Schedule 2.15 for additional information.
24. Fee owner(s) of record.
25. Fee owner(s) of record.
26. Fee owner(s) of record.
-10-
Date of Lease: 4/25/90
8. Property: Las Vegas South Strip
0000 Xxx Xxxxx Xxxx. Xxxxx
Xxx Xxxxx, XX 00000
Lessor: Xxxxxx Family Trust
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 5/1/87
9. Property: Monterey Fairgrounds. Carmel/27/
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Lessors: Forte Hotels, Inc.; X.X. Xxxxx
Lessee: Monterey Fairgrounds Travelodge
Date of Lease: 5/16/89
10. Property: El Cajon
0000 Xxxx Xxxx Xxxxxx
Xx Xxxxx, XX 00000
Lessor: G. & X. Xxxxxx
Lessee: Travelodge International Inc.,
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 12/26/67
11. Property: Hayward
00000 Xxxxxxxx Xxxx.
Xxxxxxx, XX 00000
Lessor: Xxxxxxx & Xxx Xxxxxxxxx
Lessee: Hayward Travelodge
Date of Lease: 6/19/60
12. Property: Anaheim
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Lessor: Xxxxxxxx & Xxxxxxxxx Xxxxxxxx
Lessee: Forte Hotels, Inc.
Date of Lease: 7/24/64
_____________________________
27. Property is owned in fee by the Company in common with an individual; see
Item 1 under Section I.B of this Schedule 2.16(a).
-11-
13. Property: Sacramento Downtown
0000 X Xxxxxx (xx 00xx Xxxxxx)
Xxxxxxxxxx, XX 00000
Lease 1
-------
Lessor: Xxxxxxxxx College/28/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 9/1/60
Lease 2
-------
Lessor: Xxxxxxx Food and Beverage;
X.X. Xxxxxxxxx/29/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 7/16/59
Lease 3
-------
Lessor: Xxxxxxx Food and Beverage/30/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 7/16/59
14. Property: Colton Thriftlodge
000 Xxxx Xxxxxx Xxxx.
Xxxxxx, XX 00000
Lessor: Colton Development Co.
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 2/23/73
____________________________
28. Fee owner(s) of record.
29. Fee owner(s) of record.
30. Fee owner(s) of record.
-12-
C. JOINT VENTURE PROPERTIES/31/
1. Property: Chicago X'Xxxx
0000 Xxxxxxxx Xxxx (xx Xxxxxxx)
Xxx Xxxxxxx, XX 00000-0000
Lessor: Xxxxxx Xxxxxxxx and X.X. Xxxxxxx/32/
Lessee: Chicago X'Xxxx Travelodge
Date of Lease: 6/7/61
2. Property: Las Vegas Strip
0000 Xxx Xxxxx Xxxx. Xxxxx
Xxx Xxxxx, XX 00000
Lessor: Xxxxx Xxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc. et al.
-- --
Date of Lease: 4/3/57
3. Property: Mission Valley/33/
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Sublease
--------
Sublessor: Hiwayhouse Hotels of Arizona, Inc.
Sublessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of SubLease: 1/1/59
Sub-sublease
------------
Sub-sublessor: Mission Valley Travelodge
Sub-sublessee: Adam's & Albie's Inc.
Date of Sub-
sublease: Recorded 9.8.86
______________________________
31. The leasehold interest in the "Joint Venture Properties" are held by (1)
the company in common with other entities or individuals and/or (2) a joint
venture (in which the company is a venture partner), either singly or in
common with other entities or individuals. Unless otherwise indicated, the
named lessors and lessees are the lessors and lessees of record.
32. Fee owner(s) of record.
33. Subject to two (2) groundlease(s) of record, each dated March 27, 1959,
between a third party lessor and the sublessor, as ground lessee.
-13-
4. Property: San Francisco Downtown
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Sleepy Bear Investors, Ltd.
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Individuals and
Trusts
Date of Lease: 10/26/56
5. Property: Santa Xxxxxx
0000 Xxxx Xxxx.
Xxxxx Xxxxxx, XX 00000
Lessor: Xxxx X. Xxxxxxx, et al.
-- --
Lessee: Forte Hotels, Inc.; W.G.
Enterprises, Inc.; G.H. & X.X. Xxxx
Date of Lease: 3/16/56
6. Property: Seattle Downtown
0000 0xx Xxxxxx
Xxxxxxx, XX 00000
Lessor: Xxxxx Building, Inc.
Lessee: Forte Hotels, Inc.; Xxxxxxxx X.
Xxxxxx Trust
Date of Lease: 10/17/56
7. Property: Space Needle
000 0xx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Lessor: Jaygees Holdings, Ltd.
Lessee: Forte Hotels, Inc.; Safter Inc.;
Individuals
Date of Lease: 9/28/59
8. Property: Tahoe City
000 Xxxxx Xxxx Xxxx.
X.X. Xxx 00
Xxxxx Xxxx, XX 00000
Lessor: Xxxxxxxx Investments, Ltd./34/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Individuals
Date of Lease: 8/24/61
______________________________
34. Fee owner(s) of record.
-14-
9. Property: University (Seattle)
0000 00xx Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Lease 1
-------
Lessor: P.B. Investments Ltd.
Partnership/35/
Lessee: University TraveLodge Joint Venture
Date of Lease: 4/29/87
Lease 2
-------
Lessor: Individuals/36/
Lessee: University TraveLodge Joint Venture
Date of Lease: 4/29/87
10. Property: Xxxxxxxxx
Xxxxxx xx XX-00 & X-00, Xxxx 000
(P.O. Box 218)
Xxxxxxxxxx, XX 00000-0000
Lessor: Jelso Brothers Enterprises,
Inc., et al./37/
-- --
Lessee:
The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; X.X. Xxxxxxx, et al.
-- --
Date of Lease: 5/5/64
11. Property: Atlanta Central (Downtown)
000 Xxxxxxxxx Xx., Xxxxxxxxx
Xxxxxxx, XX 00000
Lessor: Trust Company Bank; C.S. & X.X.
Xxxxxxxx/38/
Lessee: Trusthouse Forte Hotels, Inc.; X.X.
Xxxxx
Date of Lease: 3/30/62
____________________________________
35. Fee owner(s) of record.
36. Fee owner(s) of record.
37. Fee owner(s) of record.
38. Fee owner(s) of record.
-15-
12. Property: Bedford
000 Xxxxx Xxxx
Xxxxxxx, XX 00000
Lessor: X.X. Xxxxxxx/39/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Xxxxxxx Xxxxx
Date of Lease: 3/27/64
13. Property: Cincinnati
0000 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Lessor: Xxxxx X. Xxxxx
Lessee: Forte Hotels, Inc., et al.
-- --
Date of Lease: 5/6/60
14. Property: Clearwater
00000 X.X. Xxxxxxx 00 Xxxxx
Xxxxxxxxxx, XX 00000
Lessor: Gundlach's Florida Properties, Inc.
Lessee: Forte Hotels, Inc.; Individuals
Date of Lease: 8/16/63
15. Property: Fort Xxxxx
0000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Lessor: Xxxxxx X. Xxxxx
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc.; Xxxx-Xxxxx, Inc.
Date of Lease: 1/21/64
16. Property: Gainesville
0000 X.X. 00xx Xx.
Xxxxxxxxxxx, XX 00000
Lessor: X. Xxxxxxxx et al.
-- --
Lessee: Forte Hotels, Inc.; Individuals
Date of Lease: 9/26/61
17. Property: Lafayette Center
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Lessor: LH.X. Xxxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Individuals
Date of Lease: 4/17/63
_____________________________
39. Fee owner(s) of record.
-16-
18. Property Lawrence
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
RBG, L.L.C./40/
Lessee: Forte Hotels, Inc.; Individuals
Date of Lease: 5/10/68
19. Property: Louisville
2nd & Liberty Streets
(000 Xxxxx 0xx Xxxxxx)
Xxxxxxxxxx, XX 00000
Lessor: The First Xxxxxxxxxx Co./41/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 1/14/63
20. Property: Xxxxx City Thriftlodge
00 0xx Xxxxxx Xxxxxxxxx
Xxxxx Xxxx, XX 00000
Lessor: Sude Xxxxxx/42/
Travelodge International, Inc.,
Lessee: remote predecessor-in-interest to
Forte Hotels, Inc.; R.A.and X.X.
Xxxxx
Date of Lease: 1/27/64
21. Property: Natick
0000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Lessor: H.C. Atlantic Development Limited
Partnership/43/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 8/31/63
_____________________________
40. Fee owner(s) of record.
41. Fee owner(s) of record.
42. Fee owner(s) of record.
43. Fee owner(s) of record.
-17-
22. Property: Ocala
0000 Xxxxxxxxx Xxxx Xxxxxx
Xxxxx, XX 00000
Lessor: Xxxxx Xxxxxx
Lessee: Travelodge International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.; Grow Mountain
Corporation.
Date of Lease: 9/4/63
23. Property: Quincy
000 Xxxxx 0xx Xxxxxx
Xxxxxx, XX 00000
Lease 1
-------
Lessor: Lortola, Inc.; Estate of Xxxx
Xxxxx/44/
Lessee: Quincy Travelodge
Date of Lease: 6/5/61
Lease 2
-------
Lessor: Lortola, Inc.; Estate of Xxxx
Xxxxx/45/
Lessee: Quincy Travelodge
Date of Lease: 3/31/60
24. Property: Sarasota Thriftlodge
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Lessor: D.W. and X. Xxxxxxxxx
Lessee: Forte Hotels, Inc.; X.X. Xxxxx;
Artex Development Co.
Date of Lease: 6/8/61
25. Property: South Sioux City
000 Xxxxxx Xxxxxx
Xxxxx Xxxxx Xxxx, XX 00000
Lessor: M.W. and X.X. Xxxxx/46/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 1/22/64
_____________________________
44. Fee owner(s) of record.
45. Fee owner(s) of record.
46. Fee owner(s) of record.
-18-
26. Property: Terre Haute Thriftlodge
000 Xxxxx 0xx Xxxxxx
Xxxxx Xxxxx, XX 00000
Lessor: M.A. Powers, Inc.; W.W. and X.X.
Xxxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 5/26/63
27. Property: Utica
0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Lessor: Individuals
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forest
Hotels, Inc.
Date of Lease: 10/11/61
28. Property: Zanesville Thriftlodge
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxx, XX 00000
Lessor: Various Trusts and Individuals/47/
Lessee: Forte Hotels, Inc.; X.X. Xxxxx,
III, et al.
-- --
Date of Lease: 4/18/62
29. Property: Balboa Park
000 Xxx Xxxxxx
Xxx Xxxxx, XX 00000
Lessor: J. Xxxx Xxxxxxxxx/48/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 6/6/52
30. Property: Bayview Thriftlodge
0000 Xxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Lessor: X. Xxxxxxxxxx, et al./49/
-- --
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 12/15/53
_____________________________
47. Fee owner(s) of record.
48. Fee owner(s) of record.
49. Fee owner(s) of record.
-19-
31. Property: Bellevue
00000 Xxxxxxxxx 0xx Xxxxxx
Xxxxxxxx, XX 00000
Lease 1
-------
Lessor: Xxxxxxxxxx Investment Co., Inc.
Lessee: Bellevue Travelodge
Date of Lease: 3/11/64
Lease 2
-------
Lessor: Xxxxxxxxxx Investment Co., Inc.
Lessee: Bellevue Travelodge
Date of Lease: 1/11/62
32. Property: Bellingham
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Lessor: Individuals
Lessee: Travelodge of Washington, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc., et al.
-- --
Date of Lease: 7/1/61
33. Property: Berkeley
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Lessor: Xxxxxx Xxxxx Xxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; The Bentitou
Partnership
Date of Lease: 6/1/55
34. Property: Billings
0000 0xx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Lessor: Individuals
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; X.X. Xxxxxx, Inc.
Date of Lease: 10/9/61
-20-
35. Property: Burbank
0000 Xxxxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Lease 1
-------
Lessor: Xxxxx Xxxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 9/15/61
Lease 2
-------
Lessor: Xxxxx Xxxxx and Xxxxxx Xxxxx/50/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 4/15/57
36. Property: Cabrillo Central
000 X Xxxxxx
Xxx Xxxxx, XX 00000
Lessor: Xxxxxx Xxxxxx Xxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 4/1/53
37. Property: Durango
0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Lessor: Xxxxxxx X. Xxxxxxx
Lessee: Durango Travelodge
Date of Lease: 1/9/65
38. Property: Eagle Rock Welcome Inn
0000 Xxxx Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Lessor: Xxxx Xxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 8/1/49
________________________
50. Not of record.
-21-
39. Property: Embarcadero-Harbor
0000 Xxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Lessor: Catellus Development Corporation/51/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 9/12/50
40. Property: Ephrata
00 Xxxxx Xxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Lessor: Individuals
Lessee: Forte Hotels, Inc.; X.X. Xxxxxx;
A.W. and L.B. Van De Vanter
Date of Lease: 10/4/61
41. Property: Eureka
0 Xxxxxx Xxxxxx (Fourth and X Xx.)
Xxxxxx, XX 00000
Lessor: Xxxxxx X. Xxxxxxxx, et al./52/
-- --
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 1/17/60
42. Property: Flagstaff
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Lessors: The United States National Bank of
San Diego, et al..53.
-- --
Lessee: Forte Hotels, Inc.; X.X. & X.X.
Xxxxx, III
Date of Lease: 10/22/59
43. Property: Golden Gate
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessors: Xxxxxx X. Xxxxxx, et al.
-- --
Lessee: Travelodge International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc., et al.
-- --
Date of Lease: 8/9/54
_____________________________
51. Fee owner(s) of record.
52. Fee owner(s) of record.
53. Fee owner(s) of record.
-22-
44. Property: Hollywood (Travel Inn)
0000 Xxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Lessor: Xxxxx X. Xxxxx Trust
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; G.C. & M. Grief
Date of Lease: 3/7/55
45. Property: Kamloops (Canada)
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, X.X.
Xxxxxx X0X 0X0
Lease 1
-------
Lessor: Xxxxxxxxx Investments, Ltd.
Lessee: Travelodge, Ltd., remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 6/10/63
Lease 2
-------
Lessor: Xxxxxx Xxxx Xxxxxxxxx
Lessee: Travelodge, Ltd., remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 3/11/59
46. Property: La Jolla Beach
0000 Xx Xxxxx Xxxx.
Xx Xxxxx, XX 00000
Lease 1
-------
Lessor: Xxxxx X. & Xxxxxxxx Xxxxx.54.
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 12/30/63
Lease 2
-------
Lessor: Xxxxxxxx Xxxxx/55/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 12/2/63
_____________________________
54. Fee owner(s) of record.
55. Fee owner(s) of record.
-23-
47. Property: La Jolla Cove
0000 Xxxxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
Lessor: Xxxxxxxx X. and Xxxx X. Xxxxxx/56/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 1/26/53
48. Property: Las Vegas Downtown
0000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Lessor: Xxxxx Xxx Beam/57/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Las Vegas Downtown
Travelodge; Individuals
Date of Lease: 1/18/61
49. Property: Long Beach Downtown
00 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Lessor: J. Xxxxx Xxxxxxx and Xxxxxxx X.
Xxxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 12/13/63
50. Property: Xxxxxx Island
0000 Xxxxxx Xxxxxxx
Xxxxxx Xxxxxx, XX 00000
Lessor: Xxx X. & Xxxxxx X. Xxx
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 5/15/57
51. Property: Mesa
00 X. Xxxxxxx Xxxx Xxxxx
Xxxx, XX 00000
Lessor: Xxxxxx.Xxxxxxx Management
Lessee: Mesa Travelodge
Date of Lease: 3/25/64
___________________________
56. Fee owner(s) of record.
57. Fee owner(s) of record.
-24-
52. Property: Milpitas
000 Xxxx Xxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Lessor: Xxxxxxxx X. Xxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc. et al.
-- --
Date of Lease: 4/21/67
53. Property: Missoula
000 Xxxx Xxxxxxxx
Xxxxxxxx, XX 00000
Lessor: Xxxxxxx X. Xxxxx & Xxxxxx X.
Xxxxx/58/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Missoula Travelodge;
Individuals
Date of Lease: 3/12/68
54. Property: Moses Lake
000 Xxxxx Xxxxxxx Xxx
Xxxxx Xxxx, XX 00000
Lease 1
-------
Lessor: Penhallick Trust
Lessee: Forte Hotels, Inc.; E.A. and X.X.
Xxxxx
Date of Lease: 6/14/58
Lease 2
-------
Sublessor: Forte Hotels, Inc.; E.A. and X.X.
Xxxxx
Sublessee: Travelodge of Washington, Inc.;
E.A. and X.X. Xxxxx
Date of Sublease: 6/14/58
55. Property: Oceanside
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Lessor: X.X. Xxxxxxxx, et al.
-- --
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Shah & Xxxxx
Date of Lease: 7/1/53
___________________________
58. Fee owner(s) of record.
-25-
56. Property: Ogden
0000 Xxxxxxxxxx Xxxx.
Xxxxx, XX 00000
Lease 1
-------
Lessor: O. Xxxxxx Xxxxx, et al./59/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 7/9/59
Lease 2
-------
Lessor: Xxx X. Xxxxxxxx/60/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 7/18/64
57. Property: Ontario
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Lessor: X.X. Xxxxxx
Lessee: Forte Hotels, Inc.; Xxxxxx X. Xxxx
Date of Lease: 12/13/57
58. Property: Palm Springs
000 Xxxx Xxxx Xxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Lessor: Xxxxxx X. Xxxxxx
Lessee: Forte Hotels International, Inc.
remote predecessor-in-interest to
Forte Hotels, Inc., et al.
-- --
Date of Lease: 3/26/63
59. Property: Palo Alto
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Lease 1
-------
Lessor: Sydney Joseph Trust
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc.; X.X. Xxxxxx and X.X.
Xxxxxx
Date of Lease: 6/18/53
_____________________________
59. Fee owner(s) of record.
60. Fee owner(s) of record.
-26-
Lease 2
-------
(Pool Property)
Lessor: Xxxxxx X. Xxxxxx
Lessee: Forte Hotels International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.; Xxxxxx X. and
Xxxxxxx X. Bazisin
Date of Lease: 12/30/55
60. Property: Paso Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Lessor: Travelodge International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.
Lessee: Travelodge International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.; G.L. and X.X.
Xxxxx
Date of Lease: 5/23/79
61. Property: Portland Thriftlodge (Central)
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Lessor: D.G. Xxxxx Xxxxxxxxxxx
Lessee: Forte Hotels, Inc.; X.X. Xxxxx
Date of Lease: 6/27/58
62. Property: Presidio
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Xxxxx Xxxxx, et al.
-- --
Lessee: Forte Hotels, Inc.; Individuals
Date of Lease: 9/2/55
63. Property: Rancho Xxxxxxxx
00000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Lessor: Kawaguchi Bros./61/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 1/22/69
64. Property: Reno
000 Xxxx 0xx Xxxxxx
Xxxx, XX 00000
Lessor: Estate of Xxxxx Xxxxxx, et al.
-- --
_____________________________
61. Fee owner(s) of record.
-27-
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 11/27/60
65. Property: Revelstoke Lodge (Canada)
000 0xx Xx. Xxxx
Xxxxxxxxxx, X.X.
Xxxxxx X0X 250
Lessor: Travelodge Ltd., remote
predecessor-in-interest to Forte
Hotels, Inc.
Lessee: Travelodge Ltd., remote
predecessor-in-interest to Forte
Hotels, Inc.; Xxxxxxx Holdings Ltd.
Date of Lease: 10/9/63
66. Property: Roseburg
000 Xxxx Xxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Lessor: Travelodge International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.; Xxxxxx X. Xxxx,
Xx.; Xxxxxxx X. Xxxx; Xxxxxx
Corporation/62/
Lessee: Travelodge of Oregon, Inc., et al.
-- --
Date of Lease: 12/30/63
67. Property: San Francisco Airport South
000 Xxxxx Xx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Lessor: Xxxxxxxxx X. Xxxxxxxxxxx; Xxxx X.
Xxxxxxx; Xxxxxxxx Xxxxxxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; Individuals
Date of Lease: 6/9/61
68. Property: Salt Lake City
000 Xxxx Xxxxx Xxxxxx Xx.
Xxxx Xxxx Xxxx, XX 00000
Lessor: Deseret Title Holding Corporation;
Xxxxxx X. Xxxxxx Foundation
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 6/27/58
_____________________________
62. Fee owner(s) of records.
-28-
69. Property: San Diego Airport
0000 Xxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Lease 1
-------
Lessor: M. & X. Xxxxxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 5/11/61
Lease 2
-------
Lessor: A.T. & X. Xxxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 5/11/61
70. Property: San Diego Xxxxxxx.Xx. Loma
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Lessor: Xxxxxx X. & Xxxxxxxx X. Xxxxxxx, et
--
al./63/
--
Lessee: Point Loma Travelodge
Date of Lease: 9/10/53
71. Property: San Xxxx Obispo
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx Xxxxxx, XX 00000
Lessor: Xxxxxxx Motor Company, Inc.
Lessee: Forte Hotels, Inc.
Date of Lease: 7/21/61
72. Property: Santa Xxxxxxx City Center
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
X.X. and X. Xxxx
Lessor: The Travelodge Corporation, remote
Lessee: predecessor-in-interest to Forte
Hotels, Inc., et al./64/
-- --
Date of Lease: 10/5/53
73. Property: Santa Xxxx
000 Xxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Lessor: Ocean Plaza
Lessee: Forte Hotels, Inc., et al.
-- --
_____________________________
63. Fee owner(s) of record.
64. Not of record.
-29-
Date of Lease: 2/28/67
74. Property: Santa Fe
000 Xxxxxxxx Xxxx
Xxxxx Xx, XX 00000
Lessor: Xxxxx Xxxxx Xxx/65/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 12/6/62
75. Property: Santa Xxxx
0000 Xxxxx Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Lessor: X. Xxxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 6/11/54
76. Property: Santa Xxxx Downtown
College at Mendocino
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Lessors: X.X. Xxxxx, Inc., as per assignment
of lease dated 12/1/67 from
Travelodge of Illinois, Inc.
Lessee: Forte Hotels, Inc.; et al.
-- --
Date of Lease: 2/17/67
77. Property: South Tahoe
P.O. Box 70512
0000 Xxxx Xxxxx Xxxx.
Xxxxx Xxxx Xxxxx, XX 00000
Lessor: X.X. and X.X. Xxx/66/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; KLM Corporation;
Individuals
Date of Lease: 7/20/62
78. Property: Visalia Thriftlodge
0000 Xxxx Xxxxxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
Lessor: Xxxxxx X. Xxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
_____________________________
65. Fee owner(s) of record.
66. Fee owner(s) of record.
-30-
Hotels, Inc.; Visalia Lodging
Associates
Date of Lease: 7/27/59
79. Property: Walla Walla
000 Xxxx Xxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Lessor: Xxxxxxx College/67/
Lessee: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc.; X.X. and X. Xxxxxxx;
X.X. Xxxxxxxxx
Date of Lease: 4/24/62
80. Property: Williams
000 Xxxx Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Lessor: Forte Hotels International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.; Xxxxx Xxxxx
Lessee: Williams Travelodge
Date of Lease: 7/20/56
81. Property: Yakima
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Lessor: X.X. and X.X. Xxxxxx/68/
Lessee: Travelodge of Washington, Inc.;
X.X. Xxxxxx and X. Xxxxxx
Date of Lease: 11/1/59
82. Property: Yuma
0000 Xxxxx 0xx Xxxxxx
Xxxx, XX 00000
Lessor: X.X. Xxxxxx, et al./69/
-- --
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al.
-- --
Date of Lease: 11/18/58
__________________________
67. Fee owner(s) of record.
68. Fee owner(s) of record.
69. Fee owner(s) of record.
-31-
83. Property: Santa Xxxxxxx Beach
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Lessor: Twin Pines Apartments; Travelodge
International, Inc., remote
predecessor-in-interest to Forte
Hotels, Inc./70/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 3/31/51
84. Property: San Diego Uptown Welcome Inn
0000 Xxxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Lessor: Xxxxxxxxx X. and Xxxxxx X. Xxxxx/71/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 5/18/53
85. Property: San Diego Downtown
0000 Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Ground Lease 1 Xxxxxxxxx X. Xxxxxxxx;
--------------
Lessor: The Salvation Army, et al./72/
-- --
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 6/13/51
Sublease 1
----------
Sublessor: San Diego Downtown Thriftlodge
Joint Venture
Sublessee: Xxxxxxxxx X. Xxxxxxx
Date of Sublease: 8/12/94
____________________________
70. Fee owner(s) of record.
71. Fee owner(s) of record.
72. Fee owner(s) of record.
-32-
Ground Lease 2
--------------
Lessor: Xxxx X. & Xxxxxxx X. Ma; Xxxxx X. &
Xxxxxx X. Xxxxxxx/73/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 10/30/63
Sublease 2
----------
Sublessor: San Diego Downtown Thriftlodge
Joint Venture
Sublessee: Xxxxxxxxx X. Xxxxxxx
Date of Sublease: 8/12/94
86. Property: Ghiradelli Square
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Xxxxxx X. Xxxxxx
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.
Date of Lease: 7/20/55
87. Property: El Paso City Central/74/
000 Xxxx Xxxxxxxx Xxxxxx
Xx Xxxx, XX 00000
Lessor: City of El Paso
Lessees: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc.; X.X. Xxxxxx
Date of Lease: 5/15/69
88. Property: Mojave
0000 Xxxxxxx 00
Xxxxxx, XX 00000
Lessor: Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx/75/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc., et al./76/
-- --
Date of Lease: 4/5/57
________________________
73. Fee owner(s) of record.
74. This is an "alley" parcel associated with other paarcels owned in the fee
by this joint venture; see Item 1 under Section I.C of this Schedule 2.16
(a).
75. Not of record.
76. Not of record.
-33-
89. Property: Harborside Inn/Civic Center
0000 Xxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Ground Lease
------------
Lessor: Xxxx Xxxxxxx/77/
Lessee: The Travelodge Corporation, remote
predecessor-in-interest to Forte
Hotels, Inc./78/
Date of Lease: 6/3/49
Sublease/79/
--------
Sublessor: Forte Hotels, Inc./80/
Sublessee: Xxxxxxxxx X. Xxxxxxx/81/
Date of Sublease: 6/14/94
D. HEADQUARTERS FACILITIES LEASES
1. Property: El Cajon
0000 Xxxxxxxxxx Xxxxx
Xxxxx X
Xx Xxxxx, XX 00000
RB Co.-R.E., L.P./82/
FHI/San Diego, Inc./83/
Date of Lease: 4/15/95
_________________________
77. Not of record.
78. Not of record.
79. Although this sublease was terminated by a letter agreement dated 5/31/95,
it is currently in force on a month-to-month basis.
80. Not of record.
81. Not of record.
82. Not of record.
83. Not of record.
-34-
2. Property: Xxxxxxxxx Field/84/
0000 Xxxxxxxxxx Xxxxx
Xx Xxxxx, XX 00000
Lessor: Xxxxx X. Xxxxxxxx/85/
Lessee: Forte Hotels, Inc.
Date of Lease: 1/14/92
E. RETAIL LEASES
1. Property: San Francisco Wharf/86/ (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Pronto Gourmet Foods, Inc.
Date of Lease: 12/14/89
2. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Pacific Sun Investments Corporation
Date of Lease: 3/19/90
3. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Golden Bay Tour Company
Date of Lease: 6/15/92
4. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: S & J Camera, Inc.
Date of Lease: 3/19/90
__________________________
84. Subject to Ground Lease dated 10/30/80, between The County of San Diego, as
groundlessor, and Xxxxx X. Xxxxxxxx, as groundlessee.
85. Not of record.
86. With respect to this and the following twelve (12) properties, see Item 5
under Section II.A of this Schedule 2.16(a).
-35-
5. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Advance Camera Video & Electronics,
Inc.
Date of Lease: 12/9/92
6. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Budget Rent-A-Car Systems, Inc.
Date of Lease: 8/89
7. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: The Mainland Company
Date of Lease: 2/18/92
8. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Chocolate Factory, Inc.
Date of Lease: 3/20/91
9. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Paper Circus West, Inc.
Date of Lease: [undated]
10. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lease
-----
Lessor: Forte Hotels, Inc.
Lessee: J.R. Bay-Wharf, Inc.
Date of Lease: 7/27/92
Sublease
--------
Sublessor: J.R. Bay, Inc. f/k/a/ J.R. Bay-
Wharf, Inc.
Sublessee: NYSF Partners II d/b/a Ben &
Jerry's-San Francisco
Date of Sublease: 8/14/94
-36-
11. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Subway Real Estate Corporation
Date of Lease: 12/15/92
12. Property: San Francisco Wharf (Arcade)
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Advance Camera, Video &
Electronics, Inc.
Date of Lease: 12/9/92
13. Property: Parking Lot at Wharf
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Lessor: Forte Hotels International, Inc.,
remote predecessor-in-interest to
Forte Hotels, Inc.
Lessee: Xxxxx Xxxx
Date of Lease: 9/1/86
14. Property: San Xxxxxxx Xxxxx Travelodge
Hotel/87/
000 Xxxxxxxx
Xxx Xxxxxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Xxxxxxx Xxxxx
Date of Lease: 8/16/95
15. Property: Travelodge El Paso City Center/88/
000 X. Xxxxxxxx Xxxxxx
Xx Xxxx, XX 00000
Lessor: Forte Hotels, Inc.
Lessee: Wancar, Inc.
Date of Lease: 9/22/95
16. Property: Waukegan Thriftlodge
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
_____________________
87. Not of record.
88. Not of record.
-37-
Lessor: Forte Hotels International, Inc.,
predecessor-in-interest to Forte
Hotels, Inc./89/
Lessee: Xxxxx Xxxxx (Irene's Cafe)/90/
Date of Lease: 3/1/91
17. Property: Orlando Central Park
0000 Xxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Lessor: Forte Hotels, Inc./91/
Lessee: Cedar River Seafood of
Orlando, Inc./92/
Date of Lease: 9/2/93
(b) Identified Liens and Encumbrances
---------------------------------
I. OWNED REAL PROPERTY
A. HOTELS
1. Property: Portland
Title No.: N9500-1374-4(58)/93/
2. Property: Toronto Canada
Title No.: N9500-1374-(5)
3. Property: Houston
Title No.: N9500-1374-(6)
B. MOTELS
1. Property: Monterey Fairgrounds
Title No.: N9500-1374-2(23)
2. Property: Revelstoke Lodge (Canada)
Title No.: N9500-1374-4(62)
______________________
89. Not of record.
90. Not of record.
91. Not of record.
92. Not of record.
93. All title numbers are those of Title Associates, Inc., as shown on the face
pages of the title reports made available to the Buyer.
-38-
3. Property: Omak
Title No.: N9500-1374-2(25)
4. Property: Paso Xxxxxx
Title No.: N9500-1374-4(57)
C. JOINT VENTURE PROPERTIES
1. Property: El Paso City Central
Title No.: N9500-1374-2(24)
2. Property: Santa Xxxx Downtown
Title No.: N9500-1374-4(75)
3. Property: Xxxxxxxx
Title No.: N9500-1374-4(39)
4. Property: Santa Xxxxxxx Beach
Title No.: N9500-1374-4(82)
5. Property: San Xxxxxxx Xxxxx
Title No.: N9500-1374-3(1)
6. Property: Monterey
Title No.: N9500-1374-3(2)
7. Property: San Francisco Central
Title No.: N9500-1374-3(3)
8. Property: Alexandria
Title No.: N9500-1374-4(1)
9. Property: Athens Thriftlodge
Title No.: N9500-1374-4(3)
10. Property: Chambersburg
Title No.: N9500-1374-4(6)
11. Property: Lake Park
Title No.: N9500-1374-4(12)
12. Property: Lancaster
Title No.: N9500-1374-4(13)
13. Property: Boise
Title No.: N9500-1374-4(31)
14. Property: Salt Lake Downtown
Title No.: N9500-1374-4(67)
15. Property: Roseburg
-39-
Title No.: N9500-1374-4(63)
D. UNDEVELOPED PROPERTY
1. Property: Elizabethtown
Title No.: (No Report)
2. Property: Pooler, GA
Title No.: (No Report)
II. LEASED REAL PROPERTY
A. HOTELS
1. Property: Disney World
Title No.: N9500-1374-(1)
2. Property: Mt. Laurel
Title No.: N9500-1374-(3)
3. Property: San Diego Harbor Island
Title No.: N9500-1374-(4)
4. Property: J.F.K.
(No Report)
5. Property: San Francisco Wharf
Title No.: N9500-1374-(8)
6. Property: Dallas
Title No.: N9500-1374-(9)
7. Property: Long Beach
Title No.: N9500-1374-(10)
B. MOTELS
1. Property: San Francisco International
Title No.: N9500-1374-2(21)
2. Property: Las Vegas South Strip
Title No.: N9500-1374-2(22)
3. Property: Monterey Fairgrounds
Title No.: N9500-1374-2(23)
4. Property: El Cajon
Title No.: N9500-1374-2(26)
5. Property: Hayward
-40-
Title No.: N9500-1374-2(27)
6. Property: Anaheim
Title No.: N9500-1374-2(28)
7. Property: Sacramento Downtown
Title No.: N9500-1374-2(29)
8. Property: Colton Thriftlodge
Title No.: N9500-1374-2(30)
C. JOINT VENTURE PROPERTIES
1. Property: Chicago X'Xxxx
Title No.: N9500-1374-3(4)
2. Property: Las Vegas Strip
Title No.: N9500-1374-3(5)
3. Property: Mission Valley
Title No.: N9500-1374-3(6)
4. Property: San Francisco Downtown
Title No.: N9500-1374-3(7)
5. Property: Santa Xxxxxx
Title No.: N9500-1374-3(8)
6. Property: Seattle Downtown
Title No.: N9500-1374-3(9)
7. Property: Space Needle
Title No.: N9500-1374-3(10)
8. Property: Tahoe City
Title No.: N9500-1374-3(11)
9. Property: University (Seattle)
Title No.: N9500-1374-3(12)
10. Property: Ashtabula
Title No.: N9500-1374-4(2)
11. Property: Atlanta Central (Downtown)
Title No.: N9500-1374-4(4)
12. Property: Bedford
Title No.: N9500-1374-4(5)
13. Property: Cincinnati
Title No.: N9500-1374-4(7)
-41-
14. Property: Clearwater
Title No.: N9500-1374-4(8)
15. Property: Fort Xxxxx
Title No.: N9500-1374-4(9)
16. Property: Gainesville
Title No.: N9500-1374-4(10)
17. Property: Lafayette Center
Title No.: N9500-1374-4(11)
18. Property: Xxxxxxxx
Title No.: N9500-1374-4(14)
19. Property: Louisville
Title No.: N9500-1374-4(15)
20. Property: Xxxxx City Thriftlodge
Title No.: N9500-1374-4(16)
21. Property: Natick
Title No.: N9500-1374-4(17)
22. Property: Ocala
Title No.: N9500-1374-4(18)
23. Property: Quincy
Title No.: N9500-1374-4(19)
24. Property: Sarasota Thriftlodge
Title No.: N9500-1374-4(20)
25. Property: South Sioux City
Title No.: N9500-1374-4(21)
26. Property: Terre Haute Thriftlodge
Title No.: N9500-1374-4(22)
27. Property: Utica
Title No.: N9500-1374-4(23)
28. Property: Zanesville Thriftlodge
Title No.: N9500-1374-4(24)
29. Property: Balboa Park
Title No.: N9500-1374-4(25)
30. Property: Bayview Thriftlodge
Title No.: N9500-1374-2(26)
-42-
31. Property: Bellevue
Title No.: N9500-1374-4(27)
32. Property: Bellingham
Title No.: N9500-1374-4(28)
33. Property: Berkeley
Title No.: N9500-1374-4(29)
34. Property: Xxxxxxxx
Title No.: N9500-1374-4(30)
35. Property: Burbank
Title No.: N9500-1374-4(32)
36. Property: Cabrillo Central
Title No.: N9500-1374-4(33)
37. Property: Durango
Title No.: N9500-1374-4(34)
38. Property: Eagle Rock Welcome Inn
Title No.: N9500-1374-4(35)
39. Property: Embarcadero-Harbor
Title No.: N9500-1374-4(36)
40. Property: Ephrata
Title No.: N9500-1374-4(37)
41. Property: Eureka
Title No.: N9500-1374-4(38)
42. Property: Flagstaff
Title No.: N9500-1374-4(39)
43. Property: Golden Gate
Title No.: N9500-1374-4(40)
44. Property: Hollywood (Travel Inn)
Title No.: N9500-1374-4(41)
45. Property: Kamloops (Canada)
Title No.: N9500-1374-4(42)
46. Property: La Jolla Beach
Title No.: N9500-1374-4(43)
47. Property: La Jolla Cove
Title No.: N9500-1374-4(44)
48. Property: Las Vegas Downtown
-43-
Title No.: N9500-1374-4(45)
49. Property: Long Beach Downtown
Title No.: N9500-1374-4(46)
50. Property: Xxxxxx Island
Title No.: N9500-1374-4(47)
51. Property: Mesa
Title No.: N9500-1374-4(48)
52. Property: Milpitas
Title No.: N9500-1374-4(49)
53. Property: Missoula
Title No.: N9500-1374-4(50)
54. Property: Moses Lake
Title No.: N9500-1374-4(51)
55. Property: Oceanside
Title No.: N9500-1374-4(52)
56. Property: Xxxxx
Title No.: N9500-1374-4(53)
57. Property: Ontario
Title No.: N9500-1374-4(67)
58. Property: Palm Springs
Title No.: N9500-1374-4(55)
59. Property: Palo Alto
Title No.: N9500-1374-4(56)
60. Property: Paso Xxxxxx
Title No.: N9500-1374-4(57)
61. Property: Portland Thriftlodge
Title No.: N9500-1374-(2)
62. Property: Presidio
Title No.: N9500-1374-4(59)
63. Property: Rancho Xxxxxxxx
Title No.: N9500-1374-4(60)
64. Property: Reno
Title No.: N9500-1374-4(61)
65. Property: Revelstoke Lodge (Canada)
Title No.: N9500-1374-4(62)
-44-
66. Property: Roseburg
Title No.: N9500-1374-4(63)
67. Property: San Francisco Airport South
Title No.: N9500-1374-4(64)
68. Property: Salt Lake City
Title No.: N9500-1374-4(66a)
69. Property: San Diego Airport
Title No.: N9500-1374-4(68)
70. Property: San Diego Airport/Pt. Loma
Title No.: N9500-1374-4(69)
71. Property: San Xxxx Obispo
Title No.: N9500-1374-4(70)
72. Property: Santa Xxxxxxx City Center
Title No.: N9500-1374-4(71)
73. Property: Santa Xxxx
Title No.: N9500-1374-4(72)
74. Property: Santa Fe
Title No.: N9500-1374-4(73)
75. Property: Santa Xxxx
Title No.: N9500-1374-4(74)
76. Property: Santa Xxxx Downtown
Title No.: N9500-1374-4(75)
77. Property: South Tahoe
Title No.: N9500-1374-4(76)
78. Property: Visalia Thriftlodge
Title No.: N9500-1374-4(77)
79. Property: Walla Walla
Title No.: N9500-1374-4(78)
80. Property: Xxxxxxxx
Title No.: N9500-1374-4(39)
81. Property: Yakima
Title No.: N9500-1374-4(80)
82. Property: Yuma
Title No.: N9500-1374-4(81)
-45-
83. Property: Santa Xxxxxxx Beach
Title No.: N9500-1374-4(82)
84. Property: San Diego Uptown Welcome
Title No.: N9500-1374-4(83)
85. Property: San Diego Downtown
Title No.: N9500-1374-4(84)
86. Property: Ghiradelli Square
Title No.: N9500-1374-4(85)
87. Property: El Paso City Central
Title No.: N9500-1374-4(24)
D. HEADQUARTERS FACILITIES LEASES
1. Property: El Cajon
Title No.: N9500-1374-4(86)
2. Property: Xxxxxxxxx Field
Title No.: N9500-1374-2(31)
(c) Material Violations
-------------------
None.
(d) Rights of First Refusal or Options
----------------------------------
1. Property: Naperville (Chicago)
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
. Right of First Refusal: Declaration of Restrictions for the
Naperville Corporate Center in Naperville, Illinois, dated
11/27/79 by American National Bank and Trust Company of Chicago.
-46-
SCHEDULE V
SUBSIDIARIES AND JOINT VENTURES
-------------------------------
Subsidiaries
------------
Name Ownership Jurisdiction of
---- --------- ---------------
Incorporation
-------------
1. Chartwell Lodging, Inc. 100% Stock Delaware
2. National Gaming Mississippi, Inc. 100% Stock Delaware
3. Travel Beverages, Inc. 100% Stock Texas
4. Chartwell/San Diego Inc. 100% Stock California
5. Chartwell Lodging Ltd. 100% Stock Ontario, Canada
6. Hoteles NL S.A. de C.V. 100% Stock Mexico
7. Chartwell Canada Corp. 100% Stock Delaware
8. Bear Financial Corp. 100% Stock Delaware
9. Chartwell Brunswick Corp. 100% Stock Delaware
10. Chartwell Mexico Corp. 100% Stock Delaware
11. Chartwell de Mexico S.A. de C.V. 50% Stock Mexico
12. Chartwell Santa Fe Corp. 100% Stock Delaware
13. Chartwell D/FW Corp. 100% Stock Delaware
14. Chartwell Albuquerque Corp. 100% Stock Delaware
Joint Ventures
--------------
Name Ownership Type of Interest
---- --------- ----------------
San Xxxxxxx Xxxxx Travelodge 93.34% General Partnership
Atlanta Central Travelodge 50% General Partnership
Ashtabula Travelodge 37.5% General Partnership
Chicago X'Xxxx 37.5% General Partnership
Lancaster Travelodge 50% General Partnership
Natick Travelodge 50% General Partnership
Ocala Travelodge 50% General Partnership
Cincinnati Travelodge 62.5% General Partnership
Lafayette Center Travelodge 50% General Partnership
Chambersburg Travelodge 50% General Partnership
Lake Park Travelodge 49% General Partnership
Quincy Travelodge 75% General Partnership
Zanesville Travelodge 50% General Partnership
Xxxxx City Travelodge 50% General Partnership
Louisville Travelodge 50% General Partnership
South Sioux City Travelodge 50% General Partnership
Bedford Travelodge 50% General Partnership
Ogden Travelodge 37.5% General Partnership
Visalia Thriftlodge 50% General Partnership
Walla Walla Travelodge 50% General Partnership
Palo Alto Travelodge 50% General Partnership
Roseburg Travelodge 25% General Partnership
Santa Xxxxxxx Travelodge (City Center) 25% General Partnership
Yuma Travelodge 50% General Partnership
Hollywood Travel Inn 50% General Partnership
Ephrata Travelodge 50% General Partnership
Oceanside Travelodge 50% General Partnership
Yakima Travelodge 50% General Partnership
Eureka Travelodge 25% General Partnership
San Diego Airport 62.5% General Partnership
Santa Xxxx Downtown Travelodge 50% General Partnership
Xxxxxxxx Travelodge 50% General Partnership
Ranch Xxxxxxxx Travelodge 50% General Partnership
Santa Xxxx Travelodge 50% General Partnership
San Francisco Embarcadero Harbor
Travelodge 50% General Partnership
San Diego, Point Loma Travelodge 25% General Partnership
Bayview Travelodge 57.8124% General Partnership
Cabrillo Lodge 50% General Partnership
Balboa Park Travelodge 25% General Partnership
Eagle Rock Travelodge 50% General Partnership
Ontario Central Travelodge 50% General Partnership
Santa Xxxxxxx Beach Travelodge 50% General Partnership
San Diego Uptown Welcome Inn 25% General Partnership
San Diego Downtown Travelodge 25% General Partnership
Mojave Travel Inn 10% General Partnership
Gainesville Travelodge 50% General Partnership
Sarasota Thriftlodge 25% General Partnership
Clearwater Travelodge 50% General Partnership
Terre Haute Travelodge 50% General Partnership
Seattle Downtown Travelodge 50% General Partnership
Las Vegas Strip Travelodge 48.75% General Partnership
San Francisco Central Travelodge 50% General Partnership
Travelodge by the Space Needle 50% General Partnership
Monterey Downtown Travelodge 50% General Partnership
San Francisco Downtown Travelodge 50% General Partnership
Tahoe City Travelodge 50% General Partnership
Salt Lake City Downtown Travelodge 50% General Partnership
La Jolla Beach Travelodge 50% General Partnership
La Jolla Travelodge 50% General Partnership
Ghiradelli Square-Fisherman's Wharf 62.5% General Partnership
San Francisco Airport South Travelodge 50% General Partnership
Santa Fe Travelodge 50% General Partnership
Seattle University Travelodge 50% General Partnership
Durango Lodge 50% General Partnership
Salt Lake City Travelodge 37.5% General Partnership
Long Beach Downtown Travelodge 50% General Partnership
Berkeley Travelodge 50% General Partnership
Kamloops Travelodge 50% General Partnership
Presidio Travelodge 58.333% General Partnership
Santa Xxxxxx Travelodge 25% General Partnership
South Tahoe Travelodge 50% General Partnership
Santa Xxxx Travelodge 50% General Partnership
Missoula Travelodge 50% General Partnership
Mission Valley Travelodge 25% General Partnership
Bellevue Travelodge 50% General Partnership
Milpitas Travelodge 50% General Partnership
Mesa Travelodge 50% General Partnership
Portland Travelodge 50% General Partnership
Burbank Travelodge 50% General Partnership
Xxxxxxxx Travelodge 45% General Partnership
Xxxxxx Island Travelodge 50% General Partnership
San Xxxxxxxxx Xxxxxx Gate Travelodge 25% General Partnership
Moses Lake Travelodge 50% General Partnership
Boise Travelodge 50% General Partnership
San Xxxx Obispo Travelodge 50% General Partnership
Las Vegas Downtown Travelodge 50% General Partnership
Paso Xxxxxx Travelodge 50% General Partnership
Revelstoke Travelodge 50% General Partnership
Flagstaff Travelodge 50% General Partnership
Palm Springs Travelodge 50% General Partnership
SCHEDULE VI
===========
Chartwell Lodging Inc.
Existing Indebtedness
July 31, 1996
($000)
Balance at
July 31, Maturity Interest Subject
Lender 1996 Date Rate Security Location
------ ---- ---- ---- -------- --------
Wholly owned & corporate
------------------------
Bank of America 214 Feb-99 7.69% - Xxxxxxxxxx
Xxxxxxxxxxx 139 Jan-2002 10.00% Building Omak
Roboserve, Inc 53 Mar-97 9.00% - Settlement
Bank of America 51 May-97 11.38% - Reno
Bank of America 45 Mar-98 9.94% - Reno
-----------
502
-----------
Joint Ventures
--------------
Bank of America 5,701 - - - Various
Chartwell Lodging Inc. 1,345 May-2021 11.00% Building Lake Park
Chartwell Lodging Inc. 000 Xxx-00 0.00% Xxxx Xxxx Xxxx Xxxx
Bank of Montreal 166 Apr-2001 prime+1 Building Kamloops
Xxxxxxxx, Xxxxxx 117 Jan-2010 9.00% - Moses Lake
Chartwell Lodging Inc. 98 Nov-2000 9.75% - Xxxxxxxx
Chartwell Lodging Inc. 65 Jan-2001 9.25% - SF Airport South
Xxxxxxxx Xxxxxx Trust 62 Nov-2000 9.50% - Seattle Downtown
Xxxxx Family Trust 58 Apr-2001 9.25% - La Jolla Beach
Commonwealth National Bank 54 Mar-98 13.00% Building Lancaster
Xxxxxxxx Xxxxxx Trust 51 Sep-99 8.00% - Seattle Downtown
Bank of Montreal 33 Demand prime+1 - Kamloops
Chartwell Lodging Inc. 30 Demand 7.00% - Clearwater
Chartwell Lodging Inc. 25 - - - Unmatched contributions - 5 properties
Xxxxxxx, Xx and Xxxxxxxx 10 Demand 7.00% - Partner - Clearwater
Chartwell Lodging Inc. 9 Aug-2000 10.00% - Xxxxx City
Key Bank of Oregon 6 Nov-97 8.99% Van Portland
Hong 5 - - - Partner - Cabrillo Central
Sharma 4 - - - Partner - Yakima
Grace 2 - - - Partner - Fort Xxxxx
Xxxxx, XX XX 2 Sep-96 10.00% - Partner - Fort Xxxxx
-----------
8,378
-----------
PROCEDURE : FORTHPOP FORTE HOTEL INC. PAGE 1
USERID : INTLOAN3 PRINCIPAL AND INTEREST RUN DATE: 08/01/96
PRODUCT OF : CPO INFO PAST DUE REPORT RUN TIME: 06.26.05
MGMT 015611 AS OF 07/31/96
MISENTER RELEASE 1
xxxxx C O N F I D E N T I A L xxxxx 1,688,627.52
CUSTOMER NO: 87011 NL HOTELS INC
BORA. XXXX. PRINCIPAL PRINCIPAL # OF DAYS INTEREST INTEREST
CUST. LOAN PAST DUE PAST DUE PRINCIPAL PAST DUE PAST DUE
NO REF. NO BORROWER CUSTOMER NAME LOAN BALANCE TO DATE DATE PAST DUE TO DATE DATE
----- ------- --------------------------------- --------------- ----------- --------- --------- ------------ --------
7008 92153 TRAVELODGE THE WHARF EL CAJON 150,120.48 0.00 0.00
131137 TRAVELODGE THE WHARF EL CAJON 90,256.63 0.00 0.00
162363 TRAVELODGE THE WHARF EL CAJON 390,301.24 0.00 0.00
7627 56435 LAS VEGAS STRIP TRAVEL ELCAJN 0.00 0.00 0.00
72167 LAS VEGAS STRIP TRAVEL ELCAJN 194,041.22 0.00 0.00
153352 LAS VEGAS STRIP TRAVEL ELCAJN 22,999.51 0.00 0.00
12055 56086 UTICA TRAVELODGE UTICA 0.00 0.00 0.00
13010 56439 RENO DOWNTOWN TRAVELODGE RENO 44,501.04 4,377.75 07/01/96 30 291.24 07/01/96
63061 RENO DOWNTOWN TRAVELODGE RENO 58,746.35 2,216.65 07/01/96 30 290.43 07/01/96
13011 91882 DAYTONA BEACH TRAVEL HOLYHILL 0.00 0.00 0.00
13014 56518 TRAVELODGE CHAMBERSBURG 40,676.25 0.00 0.00
73824 TRAVELODGE CHAMBERSBURG 9,038.64 0.00 0.00
13016 91881 XXXXXXXX TRAVELODGE XXXXXXXX 17,795.42 0.00 0.00
13017 127194 MILPITAS TRAVELODGE MILPITAS 43,447.36 0.00 0.00
154974 MILPITAS TRAVELODGE MILPITAS 14,397.63 0.00 0.00
13019 103114 EUREKA TRAVELODGE EUREKA 51,459.09 0.00 0.00
13024 82896 ALEXANDRIA TRAVELODGE ALXDRIA 213,607.48 0.00 0.00
13026 73022 ATLANTA CENTRAL TRAVELODGE ATL 157,729.14 0.00 0.00
13026 129600 BELLINGHAM TRAVELODGE BELHAM 0.00 0.00 0.00
13020 64255 LANCASTER TRAVELODGE LNCASTER 22,550.49 0.00 0.00
00000 XXXXXXXXX TRAVELODGE LNCASTER 44,261.73 0.00 0.00
13036 95180 HADISON TRAVELODGE HADISON 0.00 0.00 0.00
13037 54204 CINCINNATI TRAVELODGE CINNATI 30,097.26 0.00 0.00
104711 CINCINNATI TRAVELODGE CINNATI 19,994.44 0.00 0.00
13039 152069 DURANGO TRAVELODGE DURANGO 40,176.65 0.00 0.00
162411 DURANGO TRAVELODGE DURANGO 32,119.47 0.00 0.00
BORA. # OF DAYS
CUST. PRINCIPAL
NO PAST DUE
----- ---------
7008
7627
12055
13010 30
30
13011
13014
13016
13017
13019
13024
13026
13026
13020
13036
13037
13039
PROCEDURE : FDRINPOP PAGE 2
USER ID : IHTLOAN3 FORTE HOTEL INC. RUN DATE: 08/01/96
PRODUCT OF: GPO INFO PRINCIPAL AND INTEREST PAST RUN TIME: 06/26/05
AS OF 07/31/96 DUE REPORT 1,166,920.28
HCHT M25611
xxxxxxxxx C O N F I D E N T I A L xxxxxxxx
CUSTOMER NO: 87831 HL HOTELS INC
XXXX. XXXX. PRINCIPAL PRINCIPLE # OF DAYS
CUST LOAN PAST DUE PAST DUE PRINCIPAL
NO REF. NO BORROWER CUSTOMER NAME LOAN BALANCE TO DATE DATE PAST DUE
---- -------- ----------------------------- ------------- ------------ ------------ --------------
13040 150004 EPHRATA TRAVELODGE EPHRATA 41,861.78 826,78 07/05/96 26
13042 70586 FLAGSTAFF TRAVELODGE FLGSTAFF 51,782.84 0.00
129139 FLAGSTAFF TRAVELODGE FLGSTAFF 6,850.84 0.00
168175 FLAGSTAFF TRAVELODGE FLGSTAFF 126,464.70 0.00
189174 FLAGSTAFF TRAVELODGE FLGSTAFF 17,149.45 0.00
13044 112868 CALLUP TRAVELODGE ATHENS 0.00 0.00
13045 145649 GOLDEN GATE TRAVELODGE SAN XXXX 29,398.06 0.00
13048 87225 MEACER ISL TRAVEL XXXXXX ISL 27,681.82 0.00
13050 141869 MONTERY DOWHTH TRAVEL MONTER 21,608.55 0.00
189060 MONTERY DOWHTH TRAVEL MONTER 45,861.10 0.00
13052 108408 XXXXXXXX XXXXXXXXXX XXXXXXXX 87,503.86 0.00
000000 XXXXXXXX XXXXXXXXXX XXXXXXXX 33,541.23 0.00
000000 XXXXXXXX XXXXXXXXXX XXXXXXXX 12,923.60 0.00
13066 149222 OCALA TRAVELODGE OCALA 36,590.71 0.00
13057 57676 SALT LAKE DHTUH TRULO 5 LK CY 55,879.17 0.00
72146 SALT LAKE DHTUH TRULO 5 LK CY 0.00 0.00
82651 SALT LAKE DHTUH TRULO 5 LK CY 16,096.62 0.00
162414 SALT LAKE DHTUH TRULO 5 LK CY 69,402.92 0.00
13058 112416 PALM SPRINGS TRAVELODGE PMS PC 60,397.10 0.00
13065 72148 PORTLAND TRAVELODGE PORTLAND 16,584.62 0.00
13604 00000 XXX XXXXXXX XXXX XXXX X ANTINO 187,563.40 0.00
00000 XXX XXXXXXX XXXX XXXX X ANTINO 19,657.60 0.00
13066 71066 TAHOE CITY TRAVELODGE TAHOE 81,904.52 0.00
98248 TAHOE CITY TRAVELODGE TAHOE 40,539.14 0.00
13071 124608 XXX XXXXXX XXX XXX XXXX 0 BAR 14,621.29 0.00
140052 XXX XXXXXX XXX XXX XXXX 0 BAR 10,856.78 0.00
152872 XXX XXXXXX XXX XXX XXXX 0 BAR 20,489.05 0.00
157119 XXX XXXXXX XXX XXX XXXX 0 BAR 12,497.45 0.00
162503 XXX XXXXXX XXX XXX XXXX 0 BAR 21,232.06 0.00
XXXX. INTEREST INTERST # OF DAYS
CUST. PAST DUE PAST DUE INTEREST
NO TO DATE DATE PAST DUE
----- -------- ----------- ------------
13840 411.45 07/05/96 26
13042 0.00
0.00
0.00
0.00
0.00
13048 0.00
13045 0.00
13048 0.00
13650 0.00
13052 0.00
13056 0.00
13057 0.00
0.00
0.00
0.00
0.00
PROCEDURE : FORTHPOP FORTE HOTEL INC. PAGE 3
USERED : INTLOANS PRINCIPAL AND INTEREST RUN DATE: 08/01/96
PRODUCT OF: CPO INFO PAST DUE REPORT RUN TIME: 06.26.05
MGMT M25622 AS OF 07/11/96
MISENTER RELEASE 1
xxxx C O N F I D E N T I A L xxxx 1,538,082.53
CUSTOMER NO: 87011 NL HOTELS INC
BORA XXXX. PRINCIPLE PRINCIPLE NO OF DAYS.
CUST. LOAN PAST DUE PAST DUE PRINCIPAL
NO XXX.XX BORROWER CUSTOMER NAME LOAN BALANCE TO DATE DATE PAST DUE
----- ------ -------------------------------- ------------ ------------ --------- -----------
13072 84409 SANTA FE TRAVELODGE SANTA FE 33,608.71 0.00
13077 188105 SARASOTA TRAVELODGE SARASOTA 94,424.25 1,504.70 06/01/96 60
13170 140059 SIOUX FALLS THRIFTL SIOUX FAL 0.00 0.00
14366 137568 VISALIA TRAVELODGE VISALIA 52,495.60 0.00
186144 VISALIA TRAVELODGE VISALIA 85,952.43 0.00
14375 125595 SIOUX CTY TRVLG S SIOUX CTV 7,885.52 0.00
14300 88248 HALLAWALLA TRAVEL HALLAWALLA 42,156.72 0.00
14381 56440 WAUKEGAH TRAVELODGE WAUKEGAH 0.00 0.00
14365 191621 XXXXXXXX TRAVELODGE XXXXXXXX 76,121.65 1,215.61 07/15/96 16
14365 106365 ZAKESVILLE TRAVELODGE ZANESVI 85,519.89 0.00
14458 137964 MISSION VALLEY TRAV SAN DEIGO 76,556.69 2,151.97 07/20/96 11
137966 MISSION VALLEY TRAV SAN DEIGO 26,956.78 757.42 07/20/96 11
14472 158077 AIRPORT TRAVELODGE SAN DEIGO 18,813.47 0.00
191212 AIRPORT TRAVELODGE SAN DEIGO 36,234.34 0.00
14479 56457 LOUISVILLE CONV CTR LOUISVILL 98,658.30 0.00
108941 LOUISVILLE CONV CTR LOUISVILL 14,931.67 0.00
192067 LOUISVILLE CONV CTR LOUISVILL 270,245.72 0.00
14480 108406 MONTEREY FAIRGDS TRA EL CAJON 111,828.27 0.00
169904 MONTEREY FAIRGDS TRA EL CAJON 41,248.33 0.00
179291 MONTEREY FAIRGDS TRA EL CAJON 139,838.63 0.00
14481 56252 BEDFORD TRAVELODGE BEDFORD 163,477.04 3,342.48 07/28/96 3
14485 141870 XXXXXX CITY TRAVE XXXXXX CITY 0.00 0.00
14491 96433 QUINCY TRAVELODGE QUINCY 20,260.99 0.00
138056 QUINCY TRAVELODGE QUINCY 73,308.39 0.00
191754 QUINCY TRAVELODGE QUINCY 36,289.11 0.00
14496 63864 SOUTH TAHOE TRA 50 LAKE TAHOE 0.00 0.00
BORA INTEREST INTEREST NO OF DAYS
CUST. PAST DUE PAST DUE INTEREST
NO TO DATE DATE PAST DUE
----- --------------- -------- ----------
13072 0.00
13077 833.72 06/01/96 60
13170 0.00
14366 0.00
0.00
14375 0.00
14300 0.00
14381 0.00
14365 639.10 07/15/96 16
14365 0.00
14458 660.70 07/20/96 11
232.64 07/20/96 11
14472 0.00
0.00
14479 0.00
0.00
0.00
14480 0.00
0.00
0.00
14481 1,436.02 07/28/96 3
14485 0.00
14491 0.00
0.00
0.00
14496 0.00
PROCEDURE : FORTRPDP FORTE HOTEL INC. PAGE 4
USERID : INTLOANS PRINCIPAL AND INTEREST RUN DATE: 08/01/96
PRODUCT OF: GPO INFO PAST DUE REPORT RUN TIME: 06.26.05
MGMT #15611 AS OF 07/31/96
MISENTER RELEASE 1
xxxxx C O N F I D E N T I A L xxxxx 1,019,661.59
CUSTOMER NO: 87011 NL HOTELS INC
XXXX. XXXX. PRINCIPAL PRINCIPAL # OF DAYS INTEREST
CUST. LOAN. PAST DUE PAST DUE PRINCIPAL PAST DUE
NO REF. NO BORROWER CUSTOMER NAME LOAN BALANCE TO DATE DATE PAST DUE TO DATE
----- ------- -------------------------------- ------------ --------- --------- --------- --------
14495 70072 SOUTH TAHOE TRA SO LAKE TAHOE 166,181.54 0.00 0.00
000000 XXXXX XXXXX XXX XX XXXX XXXXX 90,694.23 0.00 0.00
14496 65901 TRAVELLODGE SPACE NEED SEATTLE 161,463.35 0.00 0.00
84246 TRAVELLODGE SPACE NEED SEATTLE 6,010.89 0.00 0.00
14506 127196 PALO ALTO TRAVELODGE PALO ALTO 11,966.50 0.00 0.00
14507 72166 NATICK TRAVELODGE NATICK 54,977.37 0.00 0.00
152874 NATICK TRAVELODGE NATICK 21,690.77 0.00 0.00
14516 126672 MOSES LAKE TRAV MOSES LAKE 33,520.04 0.00 0.00
14524 125597 ONTARIO CENTRAL TRAV ONTARIO 33,596.47 0.00 0.00
14525 77059 LAS VEGAS DWTH TRAV LAS VEGAS 1,161.16 0.00 0.00
14526 142417 MESA TRAVELODGE MESA 51,199.01 0.00 0.00
14529 142410 XXXXXXXX TRAVELODGE XXXXXXXX 0.00 0.00 0.00
175445 XXXXXXXX TRAVELODGE XXXXXXXX 17,908.27 306.33 07/20/96 11 171.73
14530 95176 BURBANK TRAVELODGE BURBANK 2,488.56 0.00 0.00
14531 56102 SANTA ROSADWNTH TRAV STAROSA 10,934.12 0.00 07/25/96 6 0.05
142412 SANTA ROSADWNTH TRAV STAROSA 28,701.09 0.00 0.00
14532 142736 FISHERMANS WHARF TRAVELG SF 57,347.09 0.00 0.00
14537 56240 ASHTABULA TRAV AUSTINBURG 22,740.00 0.00 0.00
14538 56322 SALT LAKE XX XXXXXX SQ SALTCY 39,165.97 0.00 0.00
14539 56244 SF CENTRAL TRAVELODGE SF 40,940.70 0.00 0.00
14541 56243 W LAFAYETTE TRAV W LAFAYETTE 0.00 0.00 0.00
14549 106708 LAFAYETTE CTR TRAVEL LAFAYETTE 7,555.26 0.00 0.00
000000 XXXXXXXXX XXX TRAVEL LAFAYETTE 125,739.71 0.00 0.00
14757 63050 SANTA XXXXXX TRA SANTA XXXXXX 49,795.13 0.00 0.00
63059 SANTA XXXXXX TRA SANTA XXXXXX 49,700.16 0.00 0.00
XXXX. INTEREST % OF DAYS
CUST. PAST DUE INTEREST
NO DATE PAST DUE
----- -------- ---------
14495
14496
14506
14507
14516
14524
14525
14526
14529
07/20/96 11
14530
14531 07/25/96 6
14532
14537
14538
14539
14541
14549
14757
PROCEDURE : FORIRFDP PAGE 5
USERID : INTLOANS FORTE HOTEL INC. RUN DATE: 08/01/96
PRODUCT OF: GPO INFO PRINCIPAL AND INTEREST RUN TIME: 06.26.05
MGMT #15611 PAST DUE REPORT
AS OF 07/31/96 597,628,37
MISENTER RELEASE I
xxxxx C O N F I D E N T I A L xxxxx
CUSTOMER NO: 87011 HL HOTELS INC
XXXX. XXXX. PRINCIPLE
CUST. LOAN PAST DUE
NO REF. NO BORROWER CUSTOMER NAME LOAN BALANCE TO DATE
----- ------- ---------------------------------- -------------- ------------
18361 63980 EL PASO CITY CTR TRAV EL PASO 0.00 0.00
81718 EL PASO CITY CTR TRAV EL PASO 151,859.12 0.00
154992 EL PASO CITY CTR TRAV EL PASO 24,282.97 0.00
16807 73958 PRESIDIO TRAVELODGE SF 226,839.18 0.00
20568 116714 SF AIRPORT SO TRAVEL HILLBRAE 13,570.27 0.00
21356 117024 LA JOLLA BCH TRAVE LA JOLLA 64,997.91 0.00
22634 157982 MISSOULA TRAVELODGE MISSOULA 40,754.71 0.00
156994 MISSOULA TRAVELODGE MISSOULA 67,316.21 0.00
XXXX. PRINCIPLE # OF DAYS INTEREST INTEREST # OF DAYS
CUST. PAST DUE PRINCIPAL PAST DUE PAST DUE INTEREST
NO DATE PAST DUE TO DATE DATE PAST DUE
--------- --------- --------- --------- -------- ---------
18361 0.00
0.00
0.00
16807 0.00
20568 0.00
21356
0.00
22634
0.00
0.00
SCHEDULE VII
------------
8/09/96
-----------------------------------------------------------
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
Xxxxxxxx Xxxxx of CA, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND. EXTEND OR
6333 Greenwich Dr. Ste. 200 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
P. O. Box 89269 -----------------------------------------------------------
Xxx Xxxxx, XX 00000 COMPANIES AFFORDING COVERAGE
-----------------------------------------------------------
COMPANY
000-000-0000 A NATIONAL UNION FIRE INS. CO.
------------------------------------------------------------------------------------------------------------------------------------
INSURED COMPANY
B LEXINGTON
-----------------------------------------------------------
N L HOTELS INC. COMPANY
0000 XXXXXXXXXX XXXXX C THE INSURANCE CO. OF THE STATE OF PA
-----------------------------------------------------------
XX XXXXX XX 00000 COMPANY
D
------------------------------------------------------------------------------------------------------------------------------------
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMES ABOVE FOR THE POLICY PERIOD
INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
------------------------------------------------------------------------------------------------------------------------------------
CO POLICY EFFECTIVE POLICY EXPIRATION
LTR TYPE OF INSURANCE POLICY NUMBER DATE(MM/DD/YY) DATE(MM/DD/YY) LIMITS
------------------------------------------------------------------------------------------------------------------------------------
A GENERAL LIABILITY RMGL1216585 1/23/96 1/23/97 GENERAL AGGREGATE $ 1000000
---- -------------------------------------
X COMMERCIAL GENERAL LIABILITY PRODUCTS-COMP/OP AGG $ 1000000
-------- CLAIMS ------ -------------------------------------
MADE X OCCUR PERSONAL & ADV INJURY $ 1000000
-------- ------ -------------------------------------
EACH OCCURRENCE $ 1000000
---- OWNERS & CONT PROT -------------------------------------
FIRE DAMAGE (Any one fire) $ 250000
---- ----------------------- -------------------------------------
MED EXP (Any one person) $ 5000
------------------------------------------------------------------------------------------------------------------------------------
A AUTOMOBILE LIABILITY RMCA1353114 1/23/96 1/23/97
----
X ANY AUTO COMBINED SINGLE LIMIT $ 1000000
---- -------------------------------------
---- ALL OWNED AUTOS BODILY INJURY
SCHEDULED (Per person) $
---- -------------------------------------
HIRED AUTOS BODILY INJURY
---- (Per accident) $
---- NON-OWNED AUTO -------------------------------------
---- ----------------------- PROPERTY DAMAGE $
------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $
----- -------------------------------------
ANY AUTO OTHER THAN AUTO ONLY:
----- -------------------------------------
EACH ACCIDENT $
----- ----------------------- -------------------------------------
AGGREGATE $
------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE: $
----- -------------------------------------
UMBRELLA FORM AGGREGATE $
----- -------------------------------------
OTHER THAN UMBRELLA FORM
------------------------------------------------------------------------------------------------------------------------------------
C XXXXXXX'X COMPENSATION AND RMWC2118000 1/23/96 1/23/97 X WC STATU- OTH-
EMPLOYER'S LIABILITY TORY LIMITS ER
------ -------------------------------------
THE PROPRIETOR/ INCL-- EL EACH ACCIDENT $ 1000000
-------------------------------------
PARTNER/EXECUTIVE ------ EL DISEASE-POLICY LIMIT $ 1000000
-------------------------------------
OFFICERS ARE: X EXCL EL DISEASE-EA EMPLOYEE $ 1000000
------------------------------------------------------------------------------------------------------------------------------------
B OTHER 8784253 1/23/96 1/23/97
PROPERTY COV. 1/23/96 1/23/97 $50,000,000
D.I.C. COV 876843 $25,000,000
------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
CHASE BANK IS INCLUDED AS AN ADDITIONAL INSURED AS RESPECTS GENERAL LIABILITY
COVERAGES AND LOSS PAYEE AS RESPECTS PROPERTY & D.I.C.
*10 DAYS NOTICE FOR NON-PAYMENT OF PREMIUM
--------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELATION
SHOULD ANY OF THE ABOVE DESCRIBED
POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF. THE ISSUING
CHASE BANK COMPANY WILL ENDEAVOR TO MAIL * 90 DAYS
000 XXXX XXXXXX --
XXX XXXX, XX 00000 WRITTEN NOTICE TO THE CERTIFICATE HOLDER
NAMED TO THE LEFT BUT FAILURE TO MAIL
SUCH NOTICE SHALL IMPOSE NO OBLIGATION
OR LIABILITY OF ANY KIND UPON THE
COMPANY, ITS AGENTS OR REPRESENTATIVES.
---------------------------------------------
AUTHORIZED REPRESENTATIVE
/s/ XXXX X. XXXXXXX
--------------------------------------------------------------------------------
XXXXX 25-S(1/95) 33- 21 (C)XXXXX CORPORATION 1993
--------------------------------------------------------------------------------
NL HOTELS
01/23/96 TO 01/23/97
COVERAGES: POLICY LIMITS: DEDUCTIBLES:
---------- -------------- ------------
AUTOMOBILE:
-----------
National Union Fire Insurance Company
-------------------------------------
POL.#RMCA1353115-TEXAS CSL Each Occurrence: $1,000,000 Comprehensive: $500
POL.#RMCA1353114-AOS Medical Payments 5,000 Collision: $500
CANADIAN AUTOMOBILE:
--------------------
General Accident POL #A8977231 Third Party Liability: $1,000,000 Comprehensive: $100
------------------------------------------- Collision: $500
1989 Dodge Van ID#0X0XX00X0XX000000 Permission to Carry Passengers
1995 Chevrolet Blazer ID#GNDT13W752193766 (VEHICLE DELETED 4/13/96)
GENERAL LIABILITY:
------------------
National Union Fire Insurance Company
-------------------------------------
POL#RMGL1216585 General Aggregate: $1,000,000
POL#RMQLA2505263 Fire Legal: $ 250,000
Innkeepers: 1,000,000 $5,000
Medical Expenses: 5,000 any one person
PROP & B&M
---- -----
LEXINGTON POL # 8784253 Per Occurrence: $50,000,000 $50,000 per occurrence except peril of wind
------------------------------------------
Peril of Wind $30,000,000 Peril of Wind:2% per location of the 100%
Newly Acquired: $ 5,000,000 values of all covered property including
COC: $ 1,000,000 the 100% time element coverage of
Trees, Shrubs, Valuable Papers, properties damaged at the time of loss.
Account Receivables, Extra Expense, The minimum deductible shall be $1000,000
Transit: All $100,000 Limit per occurrence.
EDP Media: $1,000,000
1
NL HOTELS
01/23/96 TO 01/23/97
COVERAGES: POLICY LIMITS: DEDUCTIBLES:
---------- -------------- ------------
UMBRELLA
--------
AMERICAN INTERNATIONAL UNDERWRITERS INSURANCE COMPANY
-----------------------------------------------------
POL # BE309-6385 Each Occurrence/Aggregate: $25,000,000 $10,000 Self Insured Retention
Defense Outside Limit of Liability for any one occurrence not covered by
Uninsured Motorists Endorsements underlying policies.
Exclusions: Real & Personal Care, No Drop Down Endorsement
Custody & Control Securities & Financial Interest End.
Asbestos Absolute Pollution End. Amended for Named Perils
All Professional Excess $MM Each Occurrence
Discrimination & Wrongful Termination
ERISA
EXCESS UMBRELLA
---------------
FIRST LAYER:
INSURANCE COMPANY OF STATE OF PA:
---------------------------------------------
POL # 4296-4562 (Through X.X. Xxxxx) $25,000,000 ex $25,000,000 Each Occurrence
2ND & 3RD LAYER EXCESS FIRST $50,000,000: $25,000,000 P/O $50,000,000 ex $50,000,000
CIGNA:
---------
POL#XLXO17771875 $25,000,000 P/O $50,000,000 ex $50,000,000
FIREMAN'S FUND:
---------------------------------------------
POL#XXKOOO95540274 $25,000,000 P/O $50,000,000 ex $50,000,000
2 08/09/96
NL HOTELS
01/23/96 TO 01/23/97
COVERAGES: POLICY LIMITS: DEDUCTIBLES:
---------- -------------- ------------
DIC PROGRAM
-----------
EIGHT LAYERED POLICIES
1 - LEXINGTON POL # 876B43 $2.5M EQ 5% Per Unit Deductible Subject to
------------------------------------------------
2 - RLI POL # IMFO21586 $5M P/O $7.5M EX $2.5M a Minimum $100,000 Each & every Loss
------------------------------------------------
3 - ROYAL POL # KHD401922 $2.5M P/O $7.5M EX $2.5M EXCEPT:
------------------------------------------------
4 - AGRI. EXCESS POL # CPP1802078 $2.5M P/O $7.5M EX $2.5M EQ 10% Per Unit in Respect of SF
------------------------------------------------
5 - PACIFIC POL # ZG0006284 $2.5M P/O $5M EX $10M Fisherman's Wharf location: $100,000
------------------------------------------------
6 - ESSEX POL # MSP0977 $2.5M P/O $5M EX $10M Flood & Quake outside of CA; 72 Hours
------------------------------------------------
7 - PACIFIC POL # ZG006284A $2.5M P/O $5M EX $15M for BI (non CA Quake): $10,000 AOP
------------------------------------------------
8 - AMER. EMPIRE POL. # 5MP23019 $5M EX $20M
------------------------------------------------
WORKERS' COMPENSATION PROGRAMS:
-------------------------------
WORKERS' COMPENSATION (GUARANTEED COST PROGRAM - EXCEPT CALIFORNIA JOINT VENTURES:
----------------------------------------------------------------------------------
The Insurance Company of the State of PA
-----------------------------------------
XXX # XXXX0000000 - XXX $1,000,000 Each Bodily Xxxxxx Xxxxxxxx
XXX # XXXX0000000 - XX $1,000,000 Each Bodily Injury Disease
POL # RMWC2117998 - TX $1,000,000 Each Employee BI Disease
WORKERS' COMPENSATION - CALIFORNIA JOINT VENTURES:
--------------------------------------------------
Republic Indemnity Company:
--------------------------
42 Individual Policies for 42 Locations. $1,000,000 Each Bodily Injury-Accident
$1,000,000 Each Bodily Injury Disease
$1,000,000 Each Employee BI Disease
3
NL HOTELS
01/23/96 TO 01/23/97
COVERAGES: POLICY LIMITS: DEDUCTIBLES:
--------- -------------- ------------
THIRD PARTY POLLUTION LIABILITY:
--------------------------------
COMMERCE & INDUSTRY INSURANCE CO. $1,000,000 Each incident $10,000
---------------------------------
POLICY # UST6068775 $2,000,000 Aggregate Limit
Site: Xx. Xxxxxx Xxxxxxxxxx, Xx. Xxxxxx, XX $ 500,000 Aggregate Defense Expense
4
SCHEDULE VIII
EXISTING LIENS
--------------
------------------------------------------------------------------------------------------------------------------------------------
Filing Filing Filing
Debtor Secured Party Jurisdiction Type Date Number Collateral Description
------------------------------------------------------------------------------------------------------------------------------------
Forte Hotels, Inc. U.S Leasing International, Inc. CA-S/S UCC-1 8/18/93 93166397 Telecommunications Equipment
------------------------------------------------------------------------------------------------------------------------------------
Forte Hotels, Inc. GE Capital CA-S/S UCC-1 11/8/93 93226614 ADT Security System
------------------------------------------------------------------------------------------------------------------------------------
Schedule IX
EXISTING INVESTMENTS
--------------------
1) National Lodging Corp.
Specified Investments as set forth in A: Items 3, 4 and 5 of Annex A to the
pledge Agreement and all items on Annex B to the Pledge Agreement.
2) NL Hotels, Inc.
All joint ventures as set forth on Schedule V to the Credit Agreement.
3) National Gaming Mississippi, Inc.
None.
Schedule X
CERTAIN JOINT VENTURES
----------------------
Giradelli Square-Fisherman's Wharf
SCHEDULE XI
Certain Litigation
------------------
There is no material litigation which is not covered by insurance.
SCHEDULE XII
CAPITAL EXPENDITURES-1996
PRELIMINARY BUDGETS
----------------------------------------------------------------------
REVISED
PROPERTY BUDGET
----------------------------------------------------------------------
PRIORITY A-WO
----------------------------------------------------------------------
ALEXANDRIA 211,750.00
ANAHEIM 68,649.00
EL CAJON VALLEY 69,967.00
HARBOR ISLAND 587,129.00
JFK HOTEL 781,188.00
MT. LAUREL HOTEL 730,349.00
PORTLAND HOTEL 499,065.45
SACRAMENTO 326,500.00
S.F. AIRPORT NORTH 438,188.00
TORONTO 273,898.00
XXXX DISNEY HOTEL 1,231,000.00
SF WHARF-RETAIL 50,000.00
======================================================================
TOTALS 5,267,683.45
----------------------------------------------------------------------
----------------------------------------------------------------------
PRIORITY A-CMJV
----------------------------------------------------------------------
LAS VEGAS STRIP 397,674.90
MONTEREY CARAMEL 244,304.55
PALO ALTO 71,111.25
SALT LAKE CITY 152,740.35
SAN XXXXXXX XXXXX 98,700.00
SAN LOUIS OBISPO 99,618.75
SANTE FE 40,420.80
SANTA XXXXXX 39,326.70
SD MISSION VALLEY 131,371.80
SEATTLE CITY CENTER 428,662.50
SEATTLE UNIVERSITY WA Travelodge 291,900.00
SF CENTRAL 84,000.00
SF GHIRADELLI 56,437.50
SF WHARF 1,023,353.10
VISALIA 95,778.90
======================================================================
TOTALS 3,255,401.10
----------------------------------------------------------------------
Page 1
CAPTIAL EXPENDITURESD-1996
PRELIMINARY BUDJECTS
-------------------------------------------
REVISED
PROPERTY BUDGET
-------------------------------------------
-------------------------------------------
PRIORITY AJV
-------------------------------------------
ASHTABULA 136,628.10
ATHENS 70,437.90
ATLANTA DT 201,600.00
BATTLE CREEK 0.00
BEDFORD 67,200.00
BELLEVUE 31,335.15
BERKLEY 87,045.00
BURBANK 62,371.05
CHICAGO X'XXXX 327,600.00
EPHRATA 22,372.35
KAMLOOPS 239,838.90
LAKE TAHOE CITY 44,122.05
LAKE TAHOE SOUTH 104,051.85
LONG BEACH CC 383,229.00
MILPITAS 133,350.00
MISSOULA 29,400.00
MONTEREY DT 117,323.85
MOSES LAKE 383,667.90
NATICK 18,900.00
OCALA SOUTH 189,000.00
PALM SPRINGS 222,600.00
SALT LAKE CITY TEMPLE 245,798.70
SD LA JOLLA BEACH 56,700.00
SANTA XXXXXXX CC 160.774.95
SANTA XXXX 84,000.00
SEATTLE SPACE NEEDLE 34,650.00
SF AIRPORT SOUTH 147,000.00
SF DOWNTOWN 342,410.25
===========================================
TOTALS 3,943,407.00
-------------------------------------------
PRIORITY B-CMJV
-------------------------------------------
CINCINNATTI 44,100.00
EL PASO 192,150.00
XXXXXXXX 79,800.00
LOUISVILLE CC 133,350.00
XXXXX ??,???.00
SANTA XXXXXXX BEACH 103,425.00
QUINCY 58,800.00
SD AIRPORT 46,200.00
WALLA WALLA 76,912.50
===========================================
TOTALS 820,837.50
-------------------------------------------
PAGE 2
CAPITAL EXPENDITURES-1996
PRELIMINARY BUDGETS
----------------------------------------------------------------------
REVISED
PROPERTY BUDGET
----------------------------------------------------------------------
PRIORITY B-JV
----------------------------------------------------------------------
XXXXXXXX 0.00
BOISE 15,750.00
CHAMBERSBURG 21,525.00
DURANGO LODGE 36,750.00
EUREKA 29,400.00
FLAGSTAFF 66,150.00
GAINESVILLE 18,900.00
LAFAYETTE CENTER 17,850.00
LAKE PARK 50,400.00
LANCASTER 45,780.00
XXXXX CITY 39,900.00
XXXXXX ISLAND 0.00
MESA 24,150.00
OCEANSIDE 68,670.00
PASO XXXXXX 24,150.00
PORTLAND THRIFTLODGE 52,500.00
RENO 458,850.00
ROSEBURG 10,500.00
SD AIRPORT W/PL 31,500.00
SD LA JOLLA COVE 26,250.00
SD RANCHEO XXXXXXXX 29,400.00
SD GOLDEN GATE 92,400.00
SF PRESIDIO 15,750.00
SOUTH SIOUX CITY 95,655.00
XXXXXXXX 14,700.00
YUMA 59,850.00
ZANESVILLE 22,050.00
======================================================================
TOTALS 1,368,780.00
----------------------------------------------------------------------
----------------------------------------------------------------------
PRIORITY C
----------------------------------------------------------------------
SD BAYVIEW 35,595.00
SANTA XXXX 10,000.00
SANTA ROSA DT 43,050.00
SD BALBOA PARK 15,750.00
SD WELCOME INN 5,250.00
======================================================================
TOTALS 109,645.00
----------------------------------------------------------------------
EMERGENCY FUND 500,000.00
----------------------------------------------------------------------
TOTALS 15,265,754.05
----------------------------------------------------------------------
Page 3
EXHIBIT A
---------
NOTICE OF BORROWING
[Date]
The Chase Manhattan Bank, as
Administrative Agent for
the Banks party to the
Credit Agreement referred
to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ____________________
Ladies and Gentlemen:
The undersigned, [Chartwell Leisure Inc.] [Chartwell Canada Corp.]
(the "Borrower"), refers to the Credit Agreement, dated as of August 28, 1996
(as amended from time to time, the "Credit Agreement," the terms defined therein
being used herein as therein defined), among the Borrower, [Chartwell Leisure
Inc.] [Chartwell Canada Corp.], various Banks from time to time party thereto,
The Bank of Nova Scotia, as Syndication Agent, and you, as Administrative Agent
for such Banks, and hereby gives you notice, irrevocably, pursuant to Section
1.03(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing of Revolving Loans under the Credit Agreement, and in that connection
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ____________,
____./1/
(ii) The aggregate principal amount of the Proposed Borrowing
is [$][C$]___________________.
(iii) The Revolving Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [$ Base Rate Loans] [$
Eurodollar Loans] [C$ Eurodollar Loans].
-------------------
/1/ Shall be a Business Day at least four Business Days in the case of C$
Eurodollar Loans, three Business Days in the case of $ Eurodollar Loans and
at least one Business Day in the case of $ Base Rate Loans, in each case
after the date hereof.
EXHIBIT A
Page 2
(iv) The initial Interest Period for the Proposed Borrowing is
__________ month(s)./2/
The undersigned hereby certifies that the following statements are
true and correct on the date hereof, and will be true and correct on the date of
the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Documents are and will be true and correct in all material respects, both
before and after giving effect to the Proposed Borrowing and to the
application of the proceeds thereof, as though made on such date (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date); [and]
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof[.] [; and]
[(C) the proceeds of the Proposed Borrowing are to be used to effect
a Permitted Hotel Acquisition in which the total consideration exceeds
$2,000,000 and, in that connection, all of the applicable conditions set
forth in Section [9.02(ix)] [9.05(viii)] have been satisfied.]/3/
Very truly yours,
[CHARTWELL LEISURE INC.]
[CHARTWELL CANADA CORP.]
By:____________________________
Name:
Title:
---------------------------
/2/ To be included for a Proposed Borrowing of Eurodollar Loans.
/3/ To be included for a Proposed Borrowing the proceeds of which are to be
used to effect a Permitted Hotel Acquisition.
EXHIBIT B-1
-----------
REVOLVING $ NOTE
New York, New York
_____________, 1996
FOR VALUE RECEIVED, CHARTWELL LEISURE INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of _____________________or
its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The Chase Manhattan
Bank (the "Administrative Agent") located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 on the Final Maturity Date (as defined in the Agreement referred to below)
the principal sum of___________________________ DOLLARS ($ ) or,
if less, the then unpaid principal amount of all Revolving $ Loans (as
defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of August __ 1996, among the Borrower, Chartwell Canada
Corp., the lenders from time to time party thereto (including the Bank), The
Bank of Nova Scotia, as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent (as from time to time in effect, the "Agreement"), and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined
in the Agreement) and is entitled to the benefits of the HFS Guaranty and the
Subsidiaries Guaranty (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the Final Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
EXHIBIT B-1
Page 2
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
CHARTWELL LEISURE INC.
By______________________________
Name:
EXHIBIT B-2
-----------
SWINGLINE NOTE
New York, New York
_____________, 1996
FOR VALUE RECEIVED, CHARTWELL LEISURE INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of _____________________or
its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The Chase Manhattan
Bank (the "Administrative Agent") located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 on the Swingline Expiry Date (as defined in the Agreement referred to
below) the principal sum of______________________ DOLLARS ($ ) or, if less,
the then unpaid principal amount of all Swingline Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit Agreement,
dated as of August __ 1996, among the Borrower, Chartwell Canada Corp., the
lenders from time to time party thereto (including the Bank), The Bank of Nova
Scotia, as Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the HFS Guaranty and the
Subsidiaries Guaranty (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the Swingline Expiry Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
EXHIBIT B-2
Page 2
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
CHARTWELL LEISURE INC.
By______________________________
Name:
EXHIBIT B-3
-----------
REVOLVING C$ NOTE
New York, New York
_____________, 1996
FOR VALUE RECEIVED, CHARTWELL CANADA CORP., a Delaware corporation
(the "Canadian Borrower"), hereby promises to pay to the order of
_____________________ or its registered assigns (the "Bank"), in lawful money of
the United States of America in immediately available funds, at the office of
The Chase Manhattan Bank (the "Administrative Agent") located at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the Final Maturity Date (as defined in the
Agreement referred to below) the principal sum of ___________________________
CANADIAN DOLLARS (C$ ) or, if less, the then unpaid principal amount of all
Revolving C$ Loans (as defined in the Agreement) made by the Bank pursuant
to the Agreement.
The Canadian Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement.
Chartwell Leisure Inc. shall be jointly and severally obligated as a
primary obligor for the obligations of the Canadian Borrower under this Note.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of August __ 1996, among the Canadian Borrower, Chartwell
Leisure Inc., the lenders from time to time party thereto (including the Bank),
The Bank of Nova Scotia, as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent (as from time to time in effect, the "Agreement"), and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined
in the Agreement) and is entitled to the benefits of the HFS Guaranty, the
Company Guaranty and the Subsidiaries Guaranty (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment and
mandatory repayment prior to the Final Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
EXHIBIT B-3
Page 2
Each of the Canadian Borrower and Chartwell Leisure Inc. hereby waives
presentment, demand, protest or notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
CHARTWELL CANADA CORP.
By______________________________
Name:
CHARTWELL LEISURE INC.
By______________________________
Name:
EXHIBIT C
---------
LETTER OF CREDIT REQUEST
No. (1) Dated (2)
--- ---
The Chase Manhattan Bank, [as Issuing Bank and] as Administrative Agent under
the Credit Agreement (as amended, modified or supplemented from time to
time, the "Credit Agreement"), dated as of August 28, 1996, among Chartwell
Leisure Inc., Chartwell Canada Corp., the lenders from time to time party
thereto, The Chase Manhattan Bank, as Administrative Agent, and The Bank of
Nova Scotia, as Syndication Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
[Name and Address of Issuing
Bank if other than The Chase
Manhattan Bank]
Ladies and Gentlemen:
We hereby request that _____________________________ as an Issuing
Bank under the Credit Agreement referred to above, issue a [standby] [trade]
Letter of Credit for the account of the undersigned on (3) (the "Date of
-------
Issuance") in the aggregate stated amount of (4) .
-------
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
___________________________
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Date of Issuance which shall be at least five Business Days (or such
shorter period as is acceptable to the respective Issuing Bank).
(4) Aggregate initial stated amount of Letter of Credit.
2
The beneficiary of the requested Letter of Credit will be (5), and such
---
Letter of Credit will be in support of (6) and will have a stated expiration
-------
date of (7) .
-------
We hereby certify that:
(1) the representations and warranties contained in the Credit
Documents will be true and correct in all material respects on the Date of
Issuance, both before and after giving effect to the issuance of the Letter
of Credit requested hereby (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date); and
(2) no Default or Event of Default has occurred and is continuing nor,
after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or an Event of Default occur.
Copies of all documentation with respect to the supported transaction
are attached hereto.
[CHARTWELL LEISURE INC.]
[CHARTWELL CANADA CORP.]
By:________________________________
Name:
Title:
________________________________
(5) Insert name and address of beneficiary.
(6) Insert description of L/C Supportable Indebtedness and describe obligation
to which it relates in the case of standby Letters of Credit and a
description of the
commercial transaction which is being supported in the case of trade
Letters of Credit.
(7) Insert last date upon which drafts may be presented which may not be later
than (i) in the case of standby Letters of Credit, 12 months after the Date
of Issuance or, if earlier, the date which is 3 Business Days prior to the
Final Maturity Date or (ii) in the case of trade Letters of Credit, 180
days after the Date of Issuance or, if earlier, the date which is 30 days
prior to the Final Maturity Date.
EXHIBIT D
---------
Section 4.04(b)(ii) Certificate
-------------------------------
Reference is hereby made to the Credit Agreement, dated as of August
28, 1996, among Chartwell Leisure Inc., Chartwell Canada Corp., various Banks,
The Bank of Nova Scotia, as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent (the "Credit Agreement"). Pursuant to the provisions of
Section 4.04(b)(ii) of the Credit Agreement, the undersigned hereby certifies
that it is not a "bank" as such term is used in Section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By:______________________________
Name:
Title:
EXHIBIT E
---------
[NAME OF CREDIT PARTY]
----------------------
Officers' Certificate
I, the undersigned, [President/Vice President] of [NAME OF CREDIT
PARTY], a corporation organized and existing under the laws of
________________________________ (the "Company"), do hereby certify that:
1. This Certificate is furnished pursuant to Section 5 of the Credit
Agreement, dated as of August 28, 1996, among Chartwell Leisure Inc., Chartwell
Canada Corp., the lenders from time to time party thereto, The Bank of Nova
Scotia, as Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent (such Credit Agreement, as in effect on the date of this Certificate,
being herein called the "Credit Agreement"). Unless otherwise defined herein,
capitalized terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since ____________________, 19 __./1/ The signature
written opposite the name and title of each such officer is his correct
signature.
Name/2/ Office Signature
------------------- ------------------- -------------------
------------------- ------------------- -------------------
------------------- ------------------- -------------------
3. Attached hereto as Exhibit A is a certified copy of the
certificate of incorporation of the Company as filed in the Office of
____________ on 19__, together with all amendments thereto adopted through the
date hereof.
-------------------
/1/ Insert a date prior to the time of any corporate action relating to the
Credit Agreement or any other Credit Document.
/2/ Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end
of this Certificate.
EXHIBIT E
Page 2
4. Attached hereto as Exhibit B is a true and correct copy of the By-
Laws of the Company which were duly adopted, are in full force and effect on the
date hereof, and have been in effect since ___________ __, 19__.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on _________ __, 19__ [by unanimous written
consent of the Board of Directors of the Company], [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Documents to which the Company is party.
6. True and correct copies of all Shareholders' Agreements, Existing
Investment Agreements and Joint Venture Agreements, in each case of the Company
and its Subsidiaries, have been made available for review by the Agents.
7. Attached hereto as Exhibit D are true and correct copies of all
Tax Sharing Agreements of the Company and its Subsidiaries.
8. Attached hereto as Exhibit E are true and correct copies of all
Canadian Acquisition Documents.
9. Attached hereto as Exhibit F are true and correct copies of all
HFS Agreements.
10. Attached hereto as Exhibit H are true and correct copies of the
Financial Statements and Projections required to be delivered pursuant to
Section 5.12 of the Credit Agreement.
11. On the date hereof, all of the conditions set forth in Sections
5.06, 5.13, 5.14, 5.15, 7.01, 7.02 and 7.03 of the Credit Agreement have been
satisfied.]/1/
[6.][12.] On the date hereof, the representations and warranties made
by the Company in the Credit Documents to which the Company is a party are true
and correct in all material respects, both before and after giving effect to
each Credit Event to occur on the date hereof and the application of the
proceeds thereof (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
-------------------
/1/ To be included in the Certificate delivered by Chartwell Leisure Inc.
EXHIBIT E
Page 3
[7.][13.] On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Credit Events to occur on
the date hereof or from the application of the proceeds thereof.
[8.][14.] There is no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
_____________, 1996.
By:____________________________
Name:
Title:
EXHIBIT E
Page 4
EXHIBIT E
---------
[NAME OF CREDIT PARTY]
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify that:
1. [Name of Person making above certifications] is the duly elected
and qualified [President/Vice President] of the Company and the signature above
is [his/her] genuine signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5 and [8.] [14.] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
_________________, 1996.
By:____________________________
Name:
Title:
EXHIBIT F
EXECUTION COPY
--------------
PLEDGE AGREEMENT
----------------
PLEDGE AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of August 28, 1996, made by each of the
undersigned (each a "Pledgor" and, together with any other entity that becomes a
party hereto pursuant to Section 24 hereof, the "Pledgors"), to THE CHASE
MANHATTAN BANK, as Collateral Agent (the "Pledgee"), for the benefit of the
Secured Creditors (as defined below). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H :
--------------------
WHEREAS, Chartwell Leisure Inc. (the "Company"), Chartwell Canada
Corp. (the "Canadian Borrower" and, together with the Company, the "Borrowers"),
various lenders from time to time party thereto (the "Banks"), The Bank of Nova
Scotia, as Syndication Agent (the "Syndication Agent"), and The Chase Manhattan
Bank, as Administrative Agent (the "Administrative Agent") (together with any
successor administrative agent, the "Administrative Agent"), have entered into
the Credit Agreement, dated as of August 28, 1996, providing for the making of
Loans and the issuance of, and participation in, Letters of Credit as
contemplated therein (as used herein, the term "Credit Agreement" means the
Credit Agreement described above in this paragraph, as the same may be amended,
modified, extended, renewed, replaced, restated or supplemented from time to
time, and including any agreement extending the maturity of, or restructuring
all or any portion of the Indebtedness under such agreement or any successor
agreements) (the Banks, the Syndication Agent, the Administrative Agent and the
Pledgee are herein called the "Bank Creditors");
WHEREAS, each Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
with one or more Banks or any affiliate thereof (each such Bank or affiliate,
even if the respective Bank subsequently ceases to be a Bank under the Credit
Agreement for any reason, together with such Bank's or affiliate's successors
and assigns, if any, collectively, the "Other Creditors," and together with the
Bank Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all Guaranteed Obligations as described therein;
WHEREAS, it is a condition to the making of Revolving Loans and the
issuance of Letters of Credit under the Credit Agreement that each Pledgor shall
have executed and delivered this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest
2
Rate Protection Agreements or Other Hedging Agreements and, accordingly, each
Pledgor desires to enter into this Agreement in order to satisfy the conditions
described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Pledgor, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Pledgee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and indebtedness
(including, without limitation, indemnities, Fees and interest thereon) of
such Pledgor to the Bank Creditors, whether now existing or hereafter
incurred under, arising out of, or in connection with the Credit Agreement
and the other Credit Documents to which such Pledgor is a party (including,
in the case of the Subsidiary Guarantors and the Canadian Borrower, all
such obligations and indebtedness of such Subsidiary Guarantors and the
Canadian Borrower under the Subsidiaries Guaranty and, in the case of the
Company, all such obligations and indebtedness of the Company under the
Company Guaranty) and the due performance and compliance by such Pledgor
with all of the terms, conditions and agreements contained in the Credit
Agreement and such other Credit Documents (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection
Agreements or Other Hedging Agreements, being herein collectively called
the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities owing by such Pledgor to the Other Creditors under, or with
respect to, any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, and the due performance
and compliance by such Pledgor with all of the terms, conditions and
agreements contained therein (all such obligations and liabilities
described in this clause (ii) being herein collectively called the "Other
Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its security
interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such
Pledgor referred to in clauses (i) and (ii) above, after an Event of
Default (which term to mean and include any Event of Default under, and as
defined in, the Credit Agreement or any payment default under
3
any Interest Rate Protection Agreement or Other Hedging Agreement) shall
have occurred and be continuing, the reasonable expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court costs;
and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of this
Agreement.
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, PARTNERSHIP INTEREST,
ETC. (a) As used herein, (i) the term "Stock" shall mean (x) with respect to
corporations incorporated under the laws of the United States or any State or
territory thereof (each a "Domestic Corporation"), all of the issued and
outstanding shares of capital stock, and all warrants and options to purchase
any such capital stock, of any Domestic Corporation at any time owned by any
Pledgor and (y) with respect to corporations not Domestic Corporations (each a
"Foreign Corporation"), all of the issued and outstanding shares of capital
stock, and all warrants and options to purchase any such capital stock, at any
time owned by any Pledgor of any Foreign Corporation, provided that (I) no
Pledgor shall be required to pledge hereunder, and nothing herein shall be
deemed to constitute a pledge hereunder of, more than 65% of the total combined
voting power of all classes of capital stock of any Foreign Corporation entitled
to vote and (II) no Pledgor shall be required to pledge hereunder, and nothing
herein shall be deemed to constitute a pledge hereunder of, the Stock of any
Subsidiary engaged solely in the business of owning, operating and developing
Xxxxxxx hotels, (ii) the term "Notes" shall mean in the case of each Pledgor,
all promissory notes from time to time issued to, or held by, any such Pledgor
(including all intercompany promissory notes held by any such Pledgor) and (iii)
the term "Securities" shall mean all of the Stock and Notes. Each Pledgor
represents and warrants, that on the date hereof, (a) the Stock held by such
Pledgor consists of the number and type of shares of the stock of the
corporations as described in Annex A hereto for such Pledgor, (b) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Annex A hereto, (c) the Notes held by
such Pledgor consist of the promissory notes described in Annex B hereto for
such Pledgor, (d) such Pledgor is the holder of record and sole beneficial owner
of the Stock and the Notes held by such Pledgor and (e) on the date hereof, such
Pledgor owns no other Securities.
(b) As used herein, the term "Partnership Interest" shall mean the
entire partnership interests (whether general and/or limited partnership
interests) at any time owned by each Pledgor in any Person (each a "Pledged
Partnership"). Each Pledgor represents and warrants that, on the date hereof,
(x) the Partnership Interests held by such Pledgor constitutes
4
that percentage of the entire partnership interest of the respective Pledged
Partnership as is set forth on Annex C hereto for such Pledgor and (y) such
Pledgor owns no other Partnership Interests.
(c) All Stock at any time pledged or required to be pledged hereunder
is hereinafter called the "Pledged Stock;" all Notes at any time pledged or
required to be pledged hereunder are hereinafter called the "Pledged Notes;" all
Pledged Stock and Pledged Notes together are called the "Pledged Securities;"
all Partnership Interests at any time pledged or required to be pledged
hereunder are hereinafter called the "Pledged Partnership Interests", and the
Pledged Securities and the Pledged Partnership Interests, together with all
proceeds thereof, including any securities and moneys received and at the time
held by the Pledgee hereunder, are hereinafter called the "Collateral."
3. PLEDGE OF SECURITIES, ETC.
3.1 Pledge. (a) To secure the Obligations of such Pledgor and for
------
the purposes set forth in Section 1 hereof, each Pledgor hereby (i) grants to
the Pledgee a security interest in all of the Collateral owned by such Pledgor,
(ii) pledges and deposits as security with the Pledgee, the Securities owned by
such Pledgor and delivers to the Pledgee certificates or instruments therefor,
duly endorsed in blank by such Pledgor in the case of Notes and accompanied by
undated stock powers duly executed in blank by such Pledgor (and accompanied by
any transfer tax stamps required in connection with the pledge of such
Securities) in the case of Stock, or such other instruments of transfer as are
reasonably acceptable to the Pledgee, (iii) assigns, transfers, hypothecates,
mortgages, charges and sets over to the Pledgee all of such Pledgor's right,
title and interest in and to such Securities (and in and to the certificates or
instruments evidencing such Securities), to be held by the Pledgee upon the
terms and conditions set forth in this Agreement and (iv) transfers and assigns
to the Pledgee such Pledgor's Partnership Interests (and delivers any
certificates or instruments evidencing such partnership interests, duly endorsed
in blank) and all of such Pledgor's right, title and interest in each Pledged
Partnership including, without limitation:
(i) all of the capital thereof and its interest in all profits,
losses, Partnership Assets (as defined below) and other distributions to
which such Pledgor shall at any time be entitled in respect of any such
Collateral;
(ii) all other payments due or to become due to such Pledgor in
respect of any such Collateral, whether under any partnership agreement or
otherwise, whether as contractual obligations, damages, insurance proceeds
or otherwise;
(iii) all of its claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if any, under
any partnership or other agreement or at law or otherwise in respect of any
such Collateral;
5
(iv) all present and future claims, if any, of such Pledgor
against any Pledged Partnership for moneys loaned or advanced, for services
rendered or otherwise;
(v) all of such Pledgor's rights under any partnership
agreement or Joint Venture Agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of such Pledgor
relating to any Partnership Interest, including any power, if any, to
terminate, cancel or modify any general or limited partnership agreement or
Joint Venture Agreement, to execute any instruments and to take any and all
other action on behalf of and in the name of such Pledgor in respect of
such Partnership Interest and any Pledged Partnership, to make
determinations, to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice, consent,
amendment, waiver or approval, together with full power and authority to
demand, receive, enforce, collect, or receipt for any of the foregoing or
for any Partnership Asset, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action in
connection with any of the foregoing;
(vi) all other property hereafter delivered in substitution for
or in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of
any or all of the foregoing.
(b) As used herein, the term "Partnership Assets" shall mean all
assets, whether tangible or intangible and whether real, personal or mixed
(including, without limitation, all partnership capital and interests in other
partnerships), at any time owned by any Pledged Partnership or represented by
any Partnership Interest.
3.2 Subsequently Acquired Securities and/or Partnership
---------------------------------------------------
Interests. (a) If any Pledgor shall acquire (by purchase, stock dividend or
---------
otherwise) any additional Securities at any time or from time to time after the
date hereof, such Pledgor will promptly thereafter deposit such Securities (or
certificates or instruments representing Securities) as security with the
Pledgee and deliver to the Pledgee certificates or instruments therefor, duly
endorsed in blank in the case of such Notes, and accompanied by undated stock
powers duly executed in blank by such Pledgor (and accompanied by any transfer
tax stamps required in connection with the pledge of such Securities) in the
case of such Stock, or such other instruments of transfer as are reasonably
acceptable to the Pledgee, and will promptly thereafter deliver to the Pledgee a
certificate executed by a principal executive officer of such Pledgor describing
such Securities and certifying that the same has been duly pledged with the
Pledgee hereunder. No Pledgor shall be required at any time to pledge hereunder
any Stock (i) which is more than 65% of the total combined voting power of all
classes of capital stock of any Foreign
6
Corporation entitled to vote or (ii) of any Subsidiary engaged solely in the
business of owning, operating and developing Xxxxxxx hotels.
(b) If any Pledgor shall acquire (by purchase, distribution or
otherwise) any additional Partnership Interest at any time or from time to time
after the date hereof, and, to the extent such Partnership Interest is
certificated, forthwith deliver to the Pledgee certificates therefor,
accompanied by such instruments of transfer as are acceptable to the Pledgee,
and shall promptly thereafter deliver to the Pledgee a certificate executed by a
principal executive officer of such Pledgor describing such Partnership Interest
and certifying that the same has been duly pledged with the Pledgee hereunder.
3.3 Uncertificated Securities and Partnership Interests.
---------------------------------------------------
Notwithstanding anything to the contrary contained in Sections 3.1 and 3.2
hereof, if any Securities (whether now owned or hereafter acquired) or
Partnership Interests are uncertificated securities, the relevant Pledgor shall
promptly notify the Pledgee thereof, and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable law
(including, in any event, under Sections 8-313 and 8-321 of the New York Uniform
Commercial Code, if applicable). Each Pledgor further agrees to take such
actions as the Pledgee deems necessary or reasonably desirable to effect the
foregoing and to permit the Pledgee to exercise any of its rights and remedies
hereunder, and agrees to provide an opinion of counsel reasonably satisfactory
to the Pledgee with respect to any such pledge of uncertificated Securities
promptly upon the reasonable request of the Pledgee.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities or Pledged Partnership
Interests, which may be held (in the discretion of the Pledgee) in the name of
the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee
or any nominee or nominees of the Pledgee or a sub-agent appointed by the
Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default, each Pledgor
shall be entitled to exercise any and all (i) voting and other consensual rights
pertaining to the Pledged Securities owned by it, and to give consents, waivers
or ratifications in respect thereof, and (ii) voting, consent, administration,
management and other rights and remedies under any partnership agreement or
otherwise with respect to the Pledged Partnership Interests of such Pledgor;
provided, that, in each case, no vote shall be cast or any consent, waiver or
--------
ratification given or any action taken or omitted to be taken which would
violate or be inconsistent with any of the terms of this Agreement, the Credit
Agreement, any other Credit Document or any Interest Rate Protection Agreement
or Other Hedging Agreement (collectively, the "Secured Debt Agreements"), or
which would have the effect of impairing the value of the Collateral or any part
thereof or the position or interests of the Pledgee or any other Secured
Creditor in the Collateral. All such rights of each Pledgor to vote and to give
consents, waivers and ratifications shall cease in case an Event of Default has
occurred and is continuing, and Section 7 hereof shall become applicable.
7
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default, (i) all cash
dividends and distributions payable in respect of the Pledged Stock and all
payments in respect of the Pledged Notes shall be paid to the respective Pledgor
and (ii) all cash distributions in respect of the Pledged Partnership Interests
shall be paid to the respective Pledgor. The Pledgee shall be entitled to
receive directly, and to retain as part of the Collateral:
(i) all other or additional stock or other securities or
partnership interests (other than cash) paid or distributed by way of
dividend or otherwise in respect of the Collateral;
(ii) all other or additional stock or other securities or
partnership interests paid or distributed in respect of the Collateral by
way of stock-split, spin-off, split-up, reclassification, combination of
shares or similar rearrangement;
(iii) all other property (other than cash) paid or distributed
by way of dividend or distribution in respect of the Collateral; and
(iv) all other property or additional stock or other securities
or partnership interests or property which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation or similar reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other
payments which are received by any Pledgor contrary to the provisions of this
Section 6 and Section 7 hereof shall be received in trust for the benefit of the
Pledgee, shall be segregated from other property or funds of such Pledgor and
shall be forthwith paid over to the Pledgee as Collateral in the same form as so
received (with any necessary endorsement).
7. REMEDIES IN CASE OF DEFAULT OR EVENT OF DEFAULT. If there
shall have occurred and be continuing an Event of Default, then and in every
such case, the Pledgee shall be entitled to exercise all of the rights, powers
and remedies (whether vested in it by this Agreement, any other Secured Debt
Agreement or by law) for the protection and enforcement of its rights in respect
of the Collateral, and the Pledgee shall be entitled to exercise all the rights
and remedies of a secured party under the Uniform Commercial Code and also shall
be entitled, without limitation, to exercise the following rights, which each
Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 hereof to the Pledgor;
(b) to transfer all or any part of the Collateral into the Pledgee's
name or the name of its nominee or nominees;
8
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(d) to vote all or any part of the Pledged Stock or Pledged
Partnership Interests (whether or not transferred into the name of the
Pledgee) and give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto as though it were the
outright owner thereof (each Pledgor hereby irrevocably constituting and
appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with
full power of substitution to do so); and
(e) at any time and from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine, provided that at least 10 days' written
--------
notice of the time and place of any such sale shall be given to such
Pledgor. The Pledgee shall not be obligated to make any such sale of
Collateral regardless of whether any such notice of sale has theretofore
been given. Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any,
of marshalling the Collateral and any other security for the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any other Secured Creditor shall be
liable for failure to collect or realize upon any or all of the Collateral
or for any delay in so doing nor shall any of them be under any obligation
to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or any other Secured Debt
Agreement, or now or hereafter existing at law or in equity or by statute shall
be cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or
any other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. No notice to or
demand on any Pledgor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Pledgee or any other Secured Creditor to any other or
further action in any
9
circumstances without notice or demand. The Secured Creditors agree that this
Agreement may be enforced only by the action of the Administrative Agent or the
Pledgee, in each case acting upon the instructions of the Required Banks (or,
after the date on which all Credit Document Obligations have been paid in full,
the holders of at least the majority of the outstanding Other Obligations) and
that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the Pledgee or the holders of at
least a majority of the outstanding Other Obligations, as the case may be, for
the benefit of the Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Pledgee hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the Pledgee
of the type provided in clauses (iii) and (iv) of the definition of
Obligations contained in Section 1 hereof;
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to the
outstanding Primary Obligations (as defined below) shall be paid to the
Secured Creditors as provided in Section 9(e) hereof, with each Secured
Creditor receiving an amount equal to its outstanding Primary Obligations
or, if the proceeds are insufficient to pay in full all such Primary
Obligations, its Pro Rata Share (as defined below) of the amount remaining
to be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount equal
to the outstanding Secondary Obligations (as defined below) shall be paid
to the Secured Creditors as provided in Section 9(e) hereof, with each
Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all such
Secondary Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i), (ii) and (iii) and
following the termination of this Agreement pursuant to Section 19(a)
hereof, to the relevant Pledgor or, to the extent directed by such Pledgor
or a court of competent jurisdiction, to whomever may be lawfully entitled
to receive such surplus.
(b) For purposes of this Agreement, (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the
10
denominator of which is the then outstanding amount of all Primary Obligations
or Secondary Obligations, as the case may be, (y) "Primary Obligations" shall
mean (i) in the case of the Credit Document Obligations, all principal of, and
interest on, all Loans, all Unpaid Drawings theretofore made (together with all
interest accrued thereon), the aggregate Stated Amounts of all Letters of Credit
issued under the Credit Agreement, and all Fees and (ii) in the case of the
Other Obligations, all amounts due under the Interest Rate Protection Agreements
or Other Hedging Agreements (other than indemnities, fees (including, without
limitation, attorneys' fees) and similar obligations and liabilities) and (z)
"Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
(c) When payments to the Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 9 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of such Secured Creditor and the denominator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that if the
Bank Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued under the Credit Agreement (which shall only
occur after all outstanding Loans and Unpaid Drawings with respect to such
Letters of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Bank Creditors, as cash security for the repayment of
Obligations owing to the Bank Creditors as such. If any amounts are held as
cash security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit, and after the application of
all such cash security to the repayment of all Obligations owing to the Bank
Creditors after giving effect to the termination of all such Letters of Credit,
if there remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Pledgee for distribution in accordance with Section
9(a) hereof.
(e) Except as set forth in Section 9(c) hereof, all payments required
to be made to the Bank Creditors hereunder shall be made to the Administrative
Agent under the Credit Agreement for the account of the Bank Creditors and all
payments required to be made to the Other Creditors hereunder shall be made
directly to the respective Other Creditor.
(f) For purposes of applying payments received in accordance with this
Section 9, the Pledgee shall be entitled to rely upon (i) the Administrative
Agent under the
11
Credit Agreement and (ii) the Other Creditors for a determination (which the
Administrative Agent, each Other Creditor and the Secured Creditors agree (or
shall agree) to provide upon request of the Pledgee) of the outstanding
Obligations owed to the Bank Creditors or the Other Creditors, as the case may
be. Unless it has actual knowledge (including by way of written notice from a
Bank Creditor or an Other Creditor) to the contrary, the Administrative Agent
under the Credit Agreement, in furnishing information pursuant to the preceding
sentence, and the Pledgee, in acting hereunder, shall be entitled to assume that
(x) no Secondary Obligations are owing to any Bank Creditor or Other Creditor
and (y) no Interest Rate Protection Agreement or Other Hedging Agreement, or
Other Obligations in respect thereof, are in existence.
(g) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify and hold harmless the Pledgee in such capacity and each other Secured
Creditor and their respective successors, assigns, employees, agents and
servants (individually an "Indemnitee," and collectively the "Indemnitees") from
and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse each Indemnitee for all costs and expenses, including reasonable
attorneys' fees, in each case growing out of or resulting from this Agreement or
the exercise by any Indemnitee of any right or remedy granted to it hereunder or
under any other Secured Debt Agreement (but excluding any claims, demands,
losses, judgments and liabilities or expenses to the extent incurred by reason
of gross negligence or willful misconduct of such Indemnitee). In no event
shall the Pledgee be liable, in the absence of gross negligence or willful
misconduct on its part, for any matter or thing in connection with this
Agreement other than to account for monies actually received by it in accordance
with the terms hereof. If and to the extent that the obligations of any Pledgor
under this Section 11 are unenforceable for any reason, such Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to
make the Pledgee or any other Secured Creditor liable as a general partner or
limited partner of any Pledged Partnership and the Pledgee or any other Secured
Creditor by virtue of this Agreement or otherwise (except as referred to in the
following sentence) shall not have any of the duties, obligations or liabilities
of a general partner or limited partner of any Pledged
12
Partnership. The parties hereto expressly agree that, unless the Pledgee shall
become the absolute owner of a Pledged Partnership Interest pursuant hereto,
this Agreement shall not be construed as creating a partnership or joint venture
among the Pledgee, any other Secured Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of this
Section, the Pledgee, by accepting this Agreement, does not intend to become a
general partner or limited partner of any Pledged Partnership or otherwise be
deemed to be a co-venturer with respect to any Pledgor or any Pledged
Partnership either before or after an Event of Default shall have occurred. The
Pledgee shall have only those powers set forth herein and shall assume none of
the duties, obligations or liabilities of a general partner or limited partner
of any Pledged Partnership or of any Pledgor.
(c) The Pledgee shall not be obligated to perform or discharge
any obligation of any Pledgor as a result of the collateral assignment hereby
effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee to appear in or defend any action or proceeding
relating to the Collateral to which it is not a party, or to take any action
hereunder or thereunder, or to expend any money or incur any expenses or perform
or discharge any obligation, duty or liability under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the Uniform Commercial Code or other
applicable law such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem necessary and wherever
required by law in order to perfect and preserve the Pledgee's security interest
in the Collateral and hereby authorizes the Pledgee to file financing statements
and amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem necessary to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, to act from time to time solely after
the occurrence and during the continuance of an Event of Default in the
Pledgee's reasonable discretion to take any action and to execute any instrument
which the Pledgee may deem necessary or advisable to accomplish the purposes of
this Agreement.
14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by each Secured Creditor that
by accepting the benefits of
13
this Agreement each such Secured Creditor acknowledges and agrees that the
obligations of the Pledgee as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Pledgee shall act
hereunder on the terms and conditions set forth herein and in Section 12 of the
Credit Agreement.
15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of the Credit Agreement).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
Each Pledgor represents, warrants and covenants that (i) it is the legal, record
and beneficial owner of all Pledged Securities and Pledged Partnership Interests
pledged by it hereunder, subject to no Lien (except the Lien created by this
Agreement); (ii) it has full corporate or partnership power, authority and legal
right to pledge all the Pledged Securities and Pledged Partnership Interests
pledged by it pursuant to this Agreement; (iii) this Agreement has been duly
authorized, executed and delivered by such Pledgor and constitutes a legal,
valid and binding obligation of such Pledgor enforceable in accordance with its
terms except to the extent that the enforceability hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law); (iv) except
as have been obtained by the Pledgors as of the date hereof, no
consent of any other Person (including, without limitation, any stockholder,
partner or creditor of such Pledgor or any of its Subsidiaries or any Pledged
Partnership) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by such Pledgor in
connection with the execution, delivery or performance of this Agreement, the
validity or enforceability of this Agreement, the perfection or enforceability
of the Pledgee's security interest in the Collateral or, except for compliance
with or as may be required by applicable securities laws, the exercise by the
Pledgee of any of its rights or remedies provided herein; (v) the execution,
delivery and performance of this Agreement by such Pledgor will not violate any
provision of any applicable law or regulation or of any order, judgment, writ,
award or decree of any court, arbitrator or governmental authority, domestic or
foreign, applicable to such Pledgor, or of the certificate of incorporation or
by-laws (or equivalent organizational documents) of such Pledgor or of any
securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, deed of trust, loan agreement, credit agreement or
other material contract, agreement or instrument or undertaking to which such
Pledgor or any of its Subsidiaries is a party or which purports to be binding
upon such Pledgor or any of its Subsidiaries or upon any of their respective
assets and will not result in the creation or imposition of (or the obligation
to create or impose) any lien or encumbrance on any of the assets of such
Pledgor or any of its Subsidiaries except as contemplated by this Agreement;
(vi) all the shares of Stock have been duly and validly issued, are fully paid
and non-assessable and are subject to no options to purchase or similar rights;
(vii) each of the Pledged Notes constitutes, or when executed by the obligor
thereof will constitute, the legal,
14
valid and binding obligation of such obligor, enforceable in accordance with its
terms except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law); (viii) the
pledge, assignment and delivery to the Pledgee of the Securities (other than
uncertificated securities) pursuant to this Agreement creates a valid and
perfected first priority Lien in the Securities, and the proceeds thereof,
subject to no other Lien or to any agreement purporting to grant to any third
party a Lien on the property or assets of the Pledgor which would include the
Securities; (ix) each such Pledged Partnership Interest has been validly
acquired and is fully paid for (to the extent applicable) and is duly and
validly pledged hereunder; (x) each general or limited partnership agreement
delivered to the Pledgee is an original signed counterpart (or a copy thereof)
of the complete and entire such limited partnership agreement in effect on the
date hereof; (xi) each limited partnership agreement is the legal, valid and
binding obligation of each Pledgor, and to each Pledgor's knowledge, the other
parties thereto, enforceable in accordance with its terms and, together with
this Agreement, contains the entire agreement between the Pledgors relating to
the subject matter thereof; (xii) no Pledgor is in default in the payment of any
portion of any mandatory capital contribution, if any, required to be made under
any general or limited partnership agreement to which such Pledgor is a party,
and no Pledgor is in violation of any other material provisions of any
partnership agreement to which such Pledgor is a party, or otherwise in
default or violation thereunder; (xiii) to each Pledgor's best knowledge, no
Pledged Partnership Interest is subject to any defense, offset or counterclaim,
nor have any of the foregoing been asserted or alleged against such Pledgor by
any Person with respect thereto; (xiv) as of the Initial Borrowing Date, there
are no certificates, instruments, documents or other writings (other than the
general or limited partnership agreements and certificates delivered to the
Collateral Agent) which evidence any Partnership Interest of such Pledgor; (xv)
the pledge and assignment of the Pledged Partnership Interests pursuant to this
Agreement, together with the relevant filings or recordings (which filings and
recordings have been or will be made), creates a valid, perfected and continuing
first priority security interest in such Partnership Interests and the proceeds
thereof, subject to no prior lien or encumbrance or to any agreement purporting
to grant to any third party a lien or encumbrance on the property or assets of
such Pledgor which would include the Collateral; (xvi) there are no currently
effective financing statements under the UCC covering any property which is now
or hereafter may be included in the Collateral and such Pledgor will not,
without the prior written consent of the Pledgee, execute and, until the
Termination Date (as defined below), there will not ever be on file in any
public office any enforceable financing statement or statements covering any or
all of the Collateral, except financing statements filed or to be filed in favor
of the Pledgee as secured party; (xvii) each Pledgor shall give the Pledgee
prompt notice of any written claim it receives relating to the Collateral;
(xviii) each Pledgor shall deliver to the Pledgee a copy of each other demand,
notice or document received by it which may adversely affect the Pledgee's
interest in the Collateral promptly upon, but in any event within 10 days after,
such Pledgor's receipt thereof; (xix) no Pledgor shall withdraw as a general
partner or limited partner of any Pledged Partnership, or file or pursue or take
any action which may, directly or indirectly, cause a dissolution or liquidation
of or with respect to any Pledged Partnership or seek a partition of any
property of any Pledged Partnership, except as permitted
15
by the Credit Agreement; (xx) a notice in the form set forth in Annex D attached
hereto and by this reference made a part hereof (such notice the "Partnership
Notice"), appropriately completed, notifying each Pledged Partnership of the
existence of this Agreement and a certified copy of this Agreement have been
delivered by each Pledgor to the relevant Pledged Partnership, and each such
Pledgor has received and delivered to the Collateral Agent an acknowledgment in
the form set forth in Annex E attached hereto (such acknowledgement, the
"Partnership Acknowledgement"), duly executed by the relevant Pledged
Partnership; (xxi) the chief executive office and principal place of business of
such Pledgor and the sole location where the records of such Pledgor with
respect to the Collateral are kept are located at the address set forth for such
Pledgor on Annex F hereto; (xxii) no Pledgor shall move its chief executive
office, principal place of business, or such location of records unless (a) it
shall have given to the Pledgee not less than 30 days' prior written notice of
its intention so to do, describing such new location and providing such other
information in connection therewith as the Pledgee may reasonably request and
(b) with respect to such new location, it shall have taken all action,
reasonably satisfactory to the Pledgee, to maintain the security interest of the
Pledgee in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect; (xxiii) as of the date hereof, no
Pledgor operates in any jurisdiction under any name except its legal name as set
forth on the signature pages hereto; and (xxiv) no Pledgor shall change its
legal name or assume or operate in any jurisdiction under any trade, fictitious
or other name unless (a) it shall have given to the Pledgee not less than 30
days' prior written notice of its intention so to do, describing such new name
and the jurisdictions in which such new name shall be used and providing such
other information in connection therewith as the Pledgee may reasonably request
and (b) with respect to such new name, it shall have taken all action,
reasonably satisfactory to the Pledgee, to maintain the security interest of the
Pledgee in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect. Each Pledgor covenants and agrees that
it will defend the Pledgee's right, title and security interest in and to the
Collateral against the claims and demands of all persons whomsoever; and such
Pledgor covenants and agrees that it will have like title to and right to pledge
any other property at any time hereafter pledged to the Pledgee as Collateral
hereunder and will likewise defend the right thereto and security interest
therein of the Pledgee and the other Secured Creditors.
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever (except the indefeasible payment in full in cash of all
Obligations), including, without limitation: (i) any renewal, extension,
amendment or modification of or addition or supplement to or deletion from any
Secured Debt Agreement or any other instrument or agreement referred to therein,
or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument including, without limitation, this Agreement;
(iii) any furnishing of any additional security to the Pledgee or its assignee
or any acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any Person's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such
16
instrument or agreement or any term thereof; or (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not such Pledgor shall have notice
or knowledge of any of the foregoing.
18. REGISTRATION, ETC. (a) If there shall have occurred and be
continuing an Event of Default then, and in every such case, upon receipt by
any Pledgor from the Pledgee of a written request or requests that such Pledgor
cause any registration, qualification or compliance under any Federal or state
securities law or laws to be effected with respect to all or any part of the
Pledged Stock (other than any Pledged Stock of Odyssey Gaming Corporation,
Century Casinos, Inc. or Alpha Hospitality Corporation), such Pledgor as soon as
practicable and at its expense will cause such registration to be effected (and
be kept effective) and will cause such qualification and compliance to be
declared effected (and be kept effective) as may be so requested and as would
permit or facilitate the sale and distribution of such Pledged Stock, including,
without limitation, registration under the Securities Act of 1933, as then in
effect (or any similar statute then in effect), appropriate qualifications under
applicable blue sky or other state securities laws and appropriate compliance
with any other government requirements, provided, that the Pledgee shall furnish
--------
to such Pledgor such information regarding the Pledgee as such Pledgor may
reasonably request in writing and as shall be required in connection with any
such registration, qualification or compliance. Such Pledgor will cause the
Pledgee to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof, will
furnish to the Pledgee such number of prospectuses, offering circulars or other
documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify the Pledgee, each other Secured Creditor and all
others participating in the distribution of such Pledged Stock against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to such Pledgor by the Pledgee or such other
Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities or Pledged Partnership
Interests pursuant to Section 7 hereof, and such Pledged Securities or Pledged
Partnership Interests or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as then
in effect, the Pledgee may, in its sole and absolute discretion, sell such
Pledged Securities or Pledged Partnership Interests, as the case may be, or part
thereof by private sale in such manner and under such circumstances as the
Pledgee may deem necessary or advisable in order that such sale may legally be
effected without such registration. Without limiting the generality of the
foregoing, in any such event the Pledgee, in its sole and absolute discretion
(i) may proceed to make such private sale notwithstanding
17
that a registration statement for the purpose of registering such Pledged
Securities or Pledged Partnership Interests or part thereof shall have been
filed under such Securities Act, (ii) may approach and negotiate with a single
possible purchaser to effect such sale, and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Pledged Securities or Pledged Partnership Interests or part thereof. In the
event of any such sale, the Pledgee shall incur no responsibility or liability
for selling all or any part of the Pledged Securities or Pledged Partnership
Interests at a price which the Pledgee, in its sole and absolute discretion, in
good xxxxx xxxxx reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
19. TERMINATION; RELEASE. (a) After the Termination Date, this
Agreement and the security interest created hereby shall terminate (provided
that all indemnities set forth herein including, without limitation, in Section
11 hereof shall survive any such termination), and the Pledgee, at the request
and expense of any Pledgor, will execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by the Pledgee or any of
its subagents hereunder. As used in this Agreement, "Termination Date" shall
mean the date upon which the Total Revolving Loan Commitment and all Interest
Rate Protection Agreements or Other Hedging Agreements have been terminated, no
Note under the Credit Agreement is outstanding (and all Loans have been repaid
in full), all Letters of Credit have been terminated and all Obligations then
owing have been paid in full.
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 10.02 of the Credit Agreement, or is
transferred (by way of Investment) to a Joint Venture in accordance with the
Investment limitations set forth in Section 10.05 of the Credit Agreement, or is
otherwise released at the direction of the Required Banks (or all Banks if
required by Section 14.12 of the Credit Agreement) and the proceeds of such sale
or sales or from such release are applied in accordance with the provisions of
Section 4.02(a) of the Credit Agreement, to the extent required to be so
applied, the Pledgee, at the request and expense of any Pledgor, will duly
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral (and releases therefor) as is
then being (or has been) so sold or released and has not theretofore been
released pursuant to this Agreement.
(c) At any time that a Pledgor desires that the Pledgee assign,
transfer and deliver Collateral (and releases therefor) as provided in Section
19(a) or (b) hereof, it shall deliver to the Pledgee a certificate signed by a
principal executive officer of such Pledgor stating that the release of the
respective Collateral is permitted pursuant to such Section 19(a) or (b).
18
(d) If any Pledgor which is a Subsidiary of the Company (other than
the Canadian Borrower) is released from the Subsidiaries Guaranty, then such
Pledgor shall also be released herefrom.
(e) The Pledgee shall have no liability whatsoever to any other
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 19.
20. NOTICES, ETC. All such notices and communications hereunder
shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
overnight courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when delivered to the telegraph company, cable company or
overnight courier, as the case may be, or sent by telex or telecopier and when
mailed shall be effective three Business Days following deposit in the mail with
proper postage, except that notices and communications to the Pledgee shall not
be effective until received by the Pledgee. All notices and other
communications shall be in writing and addressed as follows:
(a) if to any Pledgor, at the address set forth opposite its signature
below:
(b) if to the Pledgee, at: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
(c) if to any Bank Creditor, either (x) to the Administrative Agent,
at the address of the Administrative Agent specified in the Credit Agreement or
(y) at such address as such Bank Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor at such address as such Other Creditor
shall have specified in writing to the Pledgors and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Pledgor directly affected thereby and the
Pledgee (with the written consent of either (x) the Required Banks (or all of
the Banks, to the extent required by Section 14.12 of the Credit Agreement) at
all times prior to the time on which all Credit Document Obligations have been
paid in full or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time on which all Credit Document Obligations
have been paid in full); provided, that any change, waiver, modification or
--------
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all
19
Secured Creditors in a like or similar manner) shall also require the written
consent of the Requisite Creditors (as defined below) of such affected Class.
For the purpose of this Agreement, the term "Class" shall mean each class of
Secured Creditors, i.e., whether (i) the Bank Creditors as holders of the Credit
Document Obligations or (ii) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (i) with respect to the Credit Document
Obligations, the Required Banks and (ii) with respect to the Other Obligations,
the holders of at least a majority of all obligations outstanding from time to
time under the Interest Rate Protection Agreements or Other Hedging Agreements.
22. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK. The
headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto.
23. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
24. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become a Pledgor hereunder by executing a counterpart hereof and
delivering the same to the Pledgee.
25. JUDGMENT; CURRENCY. (a) If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder in one
Currency into another Currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.
(b) The obligation of a Pledgor in respect of any sum due to any
Secured Creditor hereunder shall, notwithstanding any judgment in or receipt of
a currency (the "Alternate Currency") other than that in which such sum is
------------------
denominated in accordance with the applicable provisions of this Agreement or
the other Credit Documents (the "Agreement Currency"), be discharged only to the
------------------
extent that on the Business Day following receipt by such Secured Creditor of
any such sum so due in the Alternate Currency such Secured
20
Creditor may in accordance with normal banking procedures purchase the Agreement
Currency with the Alternate Currency; if the amount of the Agreement Currency so
purchased is less than the sum originally due to such Secured Creditor in the
Agreement Currency, each Pledgor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Secured Creditor against
such loss, and if the amount of the Agreement Currency so purchased exceeds the
sum originally due to Secured Creditor, such Secured Creditor agrees to remit to
the applicable Pledgor such excess.
26. MISCELLANEOUS. Notwithstanding anything to the contrary
contained herein or in the Credit Agreement, each Pledgor hereby covenants and
agrees that with respect to any Pledged Partnership Interest pledged by it
hereunder on the date hereof, such Pledgor will use its reasonable best efforts
to deliver to the respective Pledged Partnerships (with copies to the Pledgee) a
Partnership Notice (appropriately completed) and such Pledgor will deliver to
the Pledgee a Partnership Acknowledgement signed by the respective Pledged
Partnerships, in each case within sixty days following the Initial Borrowing
Date.
* * *
21
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Addresses
---------
000 Xxxxx Xxxxxx CHARTWELL LEISURE INC., as a Pledgor
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
c/o Chartwell Leisure Inc. CHARTWELL LODGING INC., as a Pledgor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000 By:___________________________
Telecopier No.: (000) 000-0000 Name:
Attention: Xxxxxxx Xxxxx Title:
000 Xxxxx Xxxxxx XXXXXXXXX XXXXXX CORP., as a Pledgor
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx NATIONAL GAMING MISSISSIPPI, INC.,
Xxx Xxxx, Xxx Xxxx 00000 as a Pledgor
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx By:___________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Pledgee, Collateral Agent
By:___________________________
Name:
Title:
Annex A
to Pledge Agreement
-------------------
LIST OF STOCK
-------------
Percentage
of
Outstanding
Shares of
Issuing Certificate Type of Number of Capital
Pledgor Corporation Number Shares Shares Stock
----------------------- --------------------------------- ---------- ------- -------- -----------
A. Chartwell Leisure 1. Chartwell Lodging Inc. 4 Common 1,000 100%
Inc. f/k/a National
Lodging Corp.
2. Chartwell Mexico Corp. 2 Common 1,000 100%
3. Chartwell Canada Corp. 2 Common 1,000 100%
4. Bear Financial Corp. 2 Common 1,000 100%
5. NL Texas Inc. 1 Common 1,000 100%
6. Chartwell Brunswick Corp. 2 Common 1,000 100%
7. Chartwell Santa Fe Corp. 2 Common 1,000 100%
8. Chartwell Albuquerque Corp. 2 Common 1,000 100%
9. Chartwell Nashville Corp. 1 Common 1,000 100%
10. National Lodging Corp. 1 Common 1,000 100%
(Shell
Corporation for name
reservation purposes only)
11. National Gaming Mississippi, 1 Common 100 100%
Inc.
12. Alpha Hospitality Corporation 002 Option 600,000 *
options to
acquire 1
share
each of
common
stock
13. Keystone Pittsburgh Gaming, 3 Common 100 100%
Inc.
14. Keystone Erie Gaming, Inc. 3 Common 100 100%
2
B. Chartwell Lodging 1. Travel Beverages, Inc. 5 Common 1,000 100%
Inc. f/k/a NL
Hotels Inc.
2. NL/San Diego Inc. 3 Common 100 100%
3. Hoteles NL, S.A. de C.V. 1 Common 3,250 65%
4. Chartwell Hotels Ltd. 4 Common 1,950 65%
C. Chartwell Mexico 1. Chartwell de Mexico SA de not known 50%**
Corp. C.V. (Mexican Joint Venture)
============================================================================================================================
* The Pledgor is not the sole shareholder and does not believe that its
percentage of the outstanding shares is material.
** I.e., all capital stock owned by Chartwell Mexico Corp.
Annex B
to Pledge Agreement
-------------------
LIST OF NOTES
-------------
Current
Amount
Face Value Outstanding
Payee Obligor of Note July 31, 1996 Maturity Date
----------------------------------- ----------------------- --------- -------------- --------------
Chartwell Leisure Inc. Rainbow Casino $ 10,000,000 $ 5,895,920 August 1, 2001
f/k/a National Lodging Corp. Vicksburg Partnership
f/k/a National Gaming Corp.
Chartwell Leisure Inc. Urban Redevelopment $9,538,450.73 $4,0916,012 September 30,
f/k/a National Lodging Corp. Authority of Xxxxxxxxxx 0000
National Gaming Mississippi, Inc. Rainbow Casino $ 2,000,000 $ 1,139,116 Xxxxx 0, 0000
Xxxxxxxxx Partnership
-----------------------------------------------------------------------------------------------------------
Annex C
to Pledge Agreement
-------------------
PARTNERSHIP INTERESTS
---------------------
All of the followings partnership interests are held by NL Hotels, Inc.
----------------------------------------------------------------------
Pledged Entities Percentage Owned Type of Interest
------------------------------------- ----------------- ----------------
San Xxxxxxx Xxxxx Travelodge 93.34% Partnership
Atlanta Central Travelodge 50% Partnership
Ashtabula Travelodge 37.5% Partnership
Chicago X'Xxxx 37.5% Partnership
Lancaster Travelodge 50% Partnership
Natick Travelodge 50% Partnership
Ocala Travelodge 50% Partnership
Cincinnati Travelodge 62.5% Partnership
Lafayette Center Travelodge 50% Partnership
Chambersburg Travelodge 50% Partnership
Lake Park Travelodge 49% Partnership
Quincy Travelodge 75% Partnership
Zanesville Thriftlodge 50% Partnership
Xxxxx City Thriftlodge 50% Partnership
Louisville Travelodge 50% Partnership
South Sioux City Travelodge 50% Partnership
Bedford Travelodge 50% Partnership
Gainesville Travelodge 50% Partnership
Sarasota Thriftlodge 25% Partnership
Clearwater Travelodge 50% Partnership
Terre Haute Travelodge 50% Partnership
Seattle Downtown Travelodge 50% Partnership
Las Vegas Strip Travelodge 48.75% Partnership
San Francisco Central
Travelodge 50% Partnership
Travelodge by the Space
Needle 50% Partnership
Monterey Downtown Travelodge 50% Partnership
San Francisco Downtown
Travelodge 50% Partnership
Tahoe City Travelodge 50% Partnership
Salt Lake Downtown Travelodge 50% Partnership
La Jolla Beach Travelodge 50% Partnership
La Jolla Travelodge 50% Partnership
Ghiradelli Square-Fisherman's Wharf 62.5% Partnership
San Francisco Airport South 50% Partnership
2
Travelodge
Santa Fe Travelodge 50% Partnership
Seattle University Coach House
Travelodge 50% Partnership
Durango Lodge 50% Partnership
Salt Lake City Travelodge 37.5% Partnership
Long Beach Downtown
Travelodge 50% Partnership
Berkeley Travelodge 50% Partnership
Kamloops Travelodge 50% Partnership
Presidio Travelodge 58.333% Partnership
Santa Xxxxxx Travelodge 25% Partnership
South Tahoe Travelodge 50% Partnership
Santa Xxxx Travelodge 50% Partnership
Missoula Travelodge 50% Partnership
Mission Valley Travelodge 25% Partnership
Bellevue Travelodge 50% Partnership
Milpitas Travelodge 50% Partnership
Mesa Travelodge 50% Partnership
Portland Travelodge 50% Partnership
Burbank Travelodge 50% Partnership
Xxxxxxxx Travelodge 45% Partnership
Xxxxxx Island Travelodge 50% Partnership
San Xxxxxxxxx Xxxxxx Gate
Travelodge 25% Partnership
Moses Lake Travelodge 50% Partnership
Boise Travelodge 50% Partnership
San Xxxx Obispo Travelodge 50% Partnership
Las Vegas Downtown Travelodge 50% Partnership
Paso Xxxxxx Travelodge 50% Partnership
Revelstoke Travelodge 50% Partnership
Flagstaff Travelodge 50% Partnership
Palm Springs Travelodge 50% Partnership
Xxxxx Travelodge 37.5% Partnership
Visalia Thriftlodge 50% Partnership
Walla Walla Travelodge 50% Partnership
Palo Alto Travelodge 50% Partnership
Roseburg Travelodge 25% Partnership
Santa Xxxxxxx Travelodge
(City Center) 25% Partnership
Yuma Travelodge 50% Partnership
Hollywood Travelodge 50% Partnership
(Travel Inn) 50% Partnership
Ephrata Travelodge 50% Partnership
3
Oceanside Travelodge 50% Partnership
Yakima Travelodge 50% Partnership
Eureka Travelodge 25% Partnership
San Diego Airport 62.5% Partnership
Santa Xxxx Downtown
Travelodge 50% Partnership
Xxxxxxxx Travelodge 50% Partnership
Ranch Xxxxxxxx Travelodge 50% Partnership
Santa Xxxx Travelodge 50% Partnership
San Francisco Embarcadero
Harbor Travelodge 50% Partnership
San Diego, Point Loma
Travelodge 25% Partnership
Bayview Travelodge 57.8124% Partnership
Cabrillo Lodge 50% Partnership
Balboa Park Travelodge 25% Partnership
Eagle Rock Travelodge 50% Partnership
Ontario Central Travelodge 50% Partnership
Santa Xxxxxxx Beach
Travelodge 50% Partnership
San Diego Uptown Welcome Inn 25% Partnership
San Diego Downtown Travelodge 25% Partnership
Mojave Travel Inn 10% Partnership
ANNEX D
FORM OF PARTNERSHIP NOTICE
--------------------------
[Letterhead of Pledgor]
[Date]
TO: [Name of Pledged Partnership]
Notice is hereby given that, pursuant to th Pledge Agreement (a true and
correct copy of which is attached hereto), daed as of August 28, 1996 (as
amended, modified or supplemented from time t time in accordance with the terms
thereof, the "Pledge Agreement"), among [NAMEOF PLEDGOR] (the "Pledgor"), the
other pledgors from time to time party theret and The Chase Manhattan Bank (the
"Pledgee") on behalf of the Secured Creditorsdescribed therein, the Pledgor has
pledged and assigned to the Pledgee for the bnefit of the Secured Creditors,
and granted to the Pledgee for the benefit ofthe Secured Creditors a continuing
security interest in, all right, title and inerest of the Pledgor, whether now
existing or hereafter arising or acquired, asa [limited] [general] partner in
[NAME OF Pledged Partnership] (the "Partnershp"), and in, to and under the
[TITLE OF APPLICABLE PARTNERSHIP AGREEMENT] (he "Partnership Agreement"),
including, without limitation:
(i) the Pledgor's interest in all of the capital of the Partnership
and the Pledgor's interest in all profits, losses, Partn ership Assets (as
defined in the Pledge Agreement) and other distributions to which the Pledgor
shall at any time be entitled in respect of such partnership interest;
(ii) all other payments due or to become due to the Pledgor in
respect of such partnership interest, whether under the Partnership Agreement or
otherwise, whether as contractual obligations, damages, insurance proceeds or
otherwise;
(iii) all of the Pledgor's claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if any, under the
Partnership Agreement or at law or otherwise in respect of such partnership
interest;
(iv) all present and future claims, if any, of the Pledgor against
the Partnership for moneys loaned or advanced, for services rendered or
otherwise,
(v) all of the Pledgor's rights under the Partnership Agreement, any
other organizational agreement or agreement governing the management or
ownership of the Partnership or at law to exercise and enforce every right,
power, remedy, authority, option and privilege of the Pledgor relating to the
partnership interest, including any power to terminate, cancel or modify the
Partnership Agreement, any other organizational agreement or agreement governing
the management or ownership of the Partnership, to execute any instruments and
to take any and all other action on behalf of and in the name of the Pledgor in
respect of the Partnership Interest and the Partnership, to make determinations,
to exercise any election (including, but not limited, election of remedies) or
option or to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing or for any
Page 2
to ANNEX D
Partnership Asset, to enforce or execute any checks, or other instruments or
orders, to file any claims and to take any action in connection with any of the
foregoing;
(vi) all other property hereafter delivered to the Pledgor in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all cash,
securities, interest, dividends, rights and other property at any time and from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
Pursuant to the Pledge Agreement, the Partnership is hereby authorized and
directed to register the Pledgor's pledge to the Pledgee on behalf of the
Secured Creditors of the interest of the Pledgor on the Partnership's books.
The Pledgor hereby requests the Partnership to indicate the Partnership's
acceptance of this Notice and consent to and confirmation of its terms and
provisions by signing a copy hereof where indicated on the attached page and
returning the same to the Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By:______________________________
Name:
Title:
ANNEX E
TO
PLEDGE AGREEMENT
----------------
FORM OF ACKNOWLEDGEMENT
-----------------------
[NAME OF Pledged Partnership] (the "Partnership") hereby acknowledges
receipt of a copy of the assignment by [NAME OF PLEDGOR] ("Pledgor") of its
interest under the [TITLE OF APPLICABLE PARTNERSHIP AGREEMENT] (the "Partnership
Agreement") pursuant to the terms of the Pledge Agreement, dated as of August
28, 1996 (as amended, modified or supplemented form time to time in accordance
with the terms thereof, the "Pledge Agreement"), among the Pledgor, the other
pledgors from time to time party thereto, and The Chase Manhattan Bank (the
"Pledgee") on behalf of the Secured Creditors described therein. The
undersigned hereby further confirms the registration of the Pledgor's pledge of
its interest to the Pledgee on behalf of the Secured Creditors on the
Partnership's books.
Dated: _______________ __, ____
[NAME OF PLEDGED PARTNERSHIP]
By:___________________________
Name:
Title:
Annex F
to Pledge Agreement
-------------------
OFFICE LOCATIONS
----------------
Pledgor Office Locations County
----------------------------------- --------------------------- ---------
Chartwell Leisure Inc. 000 Xxxxx Xxxxxx Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Chartwell Lodging Inc. 0000 Xxxxxxxxxx Xxxxx Xxx Xxxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Chartwell Mexico Corp. 000 Xxxxx Xxxxxx Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
National Gaming Mississippi, Inc. 000 Xxxxx Xxxxxx Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
EXHIBIT G-1
-----------
HFS GUARANTY
------------
GUARANTY, dated as of August 28, 1996 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by HFS INCORPORATED, a
Delaware corporation (the "Guarantor"). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Chartwell Leisure Inc. (the "Company"), Chartwell Canada
Corp. (the "Canadian Borrower" and, together with the Company, the "Borrowers"),
various lenders from time to time party thereto (the "Banks"), The Bank of Nova
Scotia, as Syndication Agent (the "Syndication Agent"), and The Chase Manhattan
Bank, as Administrative Agent (together with any successor administrative agent,
the "Administrative Agent"), have entered into the Credit Agreement, dated as of
August 28, 1996, providing for the making of Loans and the issuance of, and
participation in, Letters of Credit, as contemplated therein (as used herein,
the term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced or
supplemented from time to time, and including any agreement extending the
maturity of, or restructuring all or any portion of the Indebtedness under such
agreement or any successor agreement) (the Banks, the Syndication Agent, the
Administrative Agent and the Collateral Agent are herein called the
"Creditors");
WHEREAS, it is a condition to the making of Loans and the issuance of
Letters of Credit under the Credit Agreement that the Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, the Guarantor will obtain benefits from the incurrence of
Loans by the Borrowers under the Credit Agreement and, accordingly, desires to
execute this Guaranty in order to satisfy the conditions described in the
preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged,
1. The Guarantor irrevocably and unconditionally guarantees to the
Creditors the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of (x) the principal of and interest on the Notes
issued by, and the Loans made to, the Company under the Credit Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit
issued under the Credit Agreement and (y) all other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
2
Bankruptcy Code, would become due) and liabilities owing by the Company to the
Creditors under the Credit Agreement or any other Credit Document (including,
without limitation, obligations of the Canadian Borrower under the Credit
Agreement and the other Credit Documents for which the Company is jointly and
severally liable, guarantee obligations, indemnities, Fees and interest
thereon), whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any such other Credit Document and the
due performance and compliance by the Company with all of the terms, conditions
and agreements contained in the Credit Documents (all such principal, interest,
liabilities and obligations being herein collectively called the "Guaranteed
Obligations"). The Guarantor and each Creditor understands, agrees and confirms
that (i) at any time when there is any default or failure to pay when due any
Guaranteed Obligations, the Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations (subject to the limits on the aggregate
liability of the Guarantor hereunder, as provided below) against the Guarantor
only after a written demand for payment has been made on the Company and
delivered to the Guarantor and such demand has not been fully complied with (and
all Guaranteed Obligations have not been paid in full) within 10 days after the
date such demand for payment was made; provided that no such demand need be made
(and the Guaranteed Obligations hereunder shall immediately be paid by the
Guarantor, subject to the limits on the aggregate liability of the Guarantor
hereunder, as provided below) at any time when a Default or an Event of Default
exists with respect to either Borrower pursuant to Section 11.05 of the Credit
Agreement, a Guarantor Event of Default (or an event which, with the passage of
time, would be a Guarantor Event of Default) exists with respect to the
Guarantor pursuant to Section 14(d) hereof or the maturity of the Loans has been
accelerated pursuant to Section 11 of the Credit Agreement and (ii) except as
provided in the following sentence, the maximum liability of the Guarantor under
this Guaranty at any time shall not exceed the Maximum Guaranteed Amount as then
in effect. As used herein, the "Maximum Guaranteed Amount" shall mean (w)
$75,000,000 less each of (x) the aggregate amount of cash actually loaned by the
Guarantor to the Company after the Effective Date pursuant to Section 10.04(vii)
of the Credit Agreement so long as all such cash proceeds were actually used to
repay Loans pursuant to the requirements of Section 4.02(a) of the Credit
Agreement as a result of a reduction to the Total Revolving Loan Commitment
pursuant to Sections 3.03(e) and/or (f) of the Credit Agreement, (y) the
aggregate amount of cash actually invested (in return for HFS Redeemable Capital
Stock) by the Guarantor in the Company after the Effective Date pursuant to
Section 10.04(viii) of the Credit Agreement so long as all such cash proceeds
were actually used to repay Loans pursuant to the requirements of Section
4.02(a) of the Credit Agreement as a result of a reduction to the Total
Revolving Loan Commitment pursuant to Sections 3.03(e) and/or (f) of the Credit
Agreement and (z) any amounts actually demanded by the Creditors hereunder (or
payable upon a Default or an Event of Default with respect to either Borrower as
described in Section 11.05 of the Credit Agreement, a Guarantor Event of Default
(or an event which, with the passage of time, would be a Guarantor Event of
Default) with respect to the Guarantor pursuant to Section 14(d) hereof or upon
an acceleration of Loans under the Credit Agreement) and paid (subject to the
provisions of Section 21 hereof) to the Creditors pursuant to the provisions of
this Guaranty (excluding amounts payable in accordance with the following
sentence). In addition, and notwithstanding anything to the contrary contained
3
above in this Guaranty, (x) from and after the date any demand is made by the
Creditors for the payment of any amount hereunder or, if sooner, from and after
the date of the occurrence of any Default or Event of Default under Section
11.05 of the Credit Agreement with respect to either Borrower, a Guarantor Event
of Default (or any event which, with the passage of time, would be a Guarantor
Event of Default) with respect to the Guarantor pursuant to Section 14(d) hereof
or any acceleration of Loans pursuant to Section 11 of the Credit Agreement, the
Guarantor shall owe to the Creditors, in addition to the Maximum Guaranteed
Amount, interest on any amounts not immediately paid hereunder at a rate per
annum equal to the rate per annum applicable to past due amounts owing pursuant
to the Credit Agreement (as in effect on the date hereof) and (y) any amounts
owing pursuant to Section 15 of this Guaranty shall be independently owing by
the Guarantor, with any amounts paid pursuant to clauses (x) and (y) of this
sentence not to be counted in determining (and same shall not reduce) the
Maximum Guaranteed Amount. The Guarantor understands, agrees and confirms that
the Creditors may, subject to the two preceding sentences, enforce this Guaranty
up to the full amount of the Guaranteed Obligations against the Guarantor
without proceeding against either Borrower, against any security for the
Guaranteed Obligations, or against any other guarantor under any other guaranty
covering the Guaranteed Obligations. This Guaranty shall constitute a guaranty
of payment and performance, and not of collection.
2. Additionally, but subject to the limitations on the aggregate
amount guaranteed as provided in preceding Section 1, the Guarantor
unconditionally and irrevocably guarantees the payment of any and all Guaranteed
Obligations to the Creditors, whether or not due or payable by the Borrowers,
upon the occurrence in respect of either Borrower of a Default or an Event of
Default specified in Section 11.05 of the Credit Agreement or the occurrence in
respect of the Guarantor of any of the events specified in Section 14(d) of this
Guaranty which constitute a Guarantor Event of Default (or would, with the
passage of time, constitute a Guarantor Event of Default), and unconditionally
and irrevocably promises to pay such Guaranteed Obligations to the Creditors, or
order, on demand, in lawful money of the United States.
3. (a) The liability of the Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
whether executed by the Guarantor, any other guarantor or by any other party,
and the liability of the Guarantor hereunder shall not be affected or impaired
by any circumstance or occurrence whatsoever, including, without limitation: (i)
any direction as to application of payment by either Borrower or by any other
party, (ii) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of either
Borrower, (iii) any payment on or in reduction of any such other guaranty or
undertaking except to the extent that any such payment or reduction results in
the actual permanent reduction of the Guaranteed Obligations, (iv) any
dissolution, termination or increase, decrease or change in personnel by either
Borrower, (v) any payment made to the Administrative Agent or the other
Creditors on the indebtedness which the Administrative Agent or such other
Creditor repays either Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
the Guarantor waives any right to the deferral or
4
modification of its obligations hereunder by reason of any such proceeding, (vi)
any action or inaction by the Creditors as contemplated in Section 6 hereof, or
(vii) any invalidity, irregularity or unenforceability of all or part of the
Guaranteed Obligations or of any security therefor.
(b) Without limiting the generality of the foregoing, the Guarantor
hereby agrees that notwithstanding anything to the contrary contained in the
Financing Agreement or any other HSF Agreement or any other agreement, no
occurrence of events (including a breach by the Company of its obligations under
the Financing Agreement or respect to any loan made by the Guarantor to either
Borrower) shall have any effect whatsoever on this Guaranty, and so long as the
Bank Termination Date has not occurred in no event shall either Borrower be
required to deliver to the Guarantor (and the Guarantor shall not accept) any
cash that either Borrower might otherwise be required to deliver to the
Guarantor pursuant to Section 2.1(b) of the Financing Agreement.
4. The obligations of the Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrowers, and a separate action or
actions may be brought and prosecuted against the Guarantor whether or not
action is brought against any other guarantor or either Borrower and whether or
not any other guarantor or either Borrower be joined in any such action or
actions. The Guarantor waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by either Borrower or other circumstance which
operates to toll any statute of limitations as to either Borrower shall operate
to toll the statute of limitations as to the Guarantor.
5. The Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. The Guarantor assumes all responsibility for being and
keeping itself informed of either Borrower's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which the Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise the Guarantor of information known to them regarding such
circumstances or risks.
6. Any Creditor may at any time and from time to time without the
consent of, or notice to the Guarantor, without incurring responsibility to the
Guarantor, without impairing or releasing the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed Obligations
(including any increase or decrease in the rate of interest thereon), any
security therefor, or any liability
5
incurred directly or indirectly in respect thereof, and the guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset there
against;
(c) exercise or refrain from exercising any rights against the
Borrowers, any other Credit Party or any other Person or otherwise act or
refrain from acting;
(d) release or substitute any one or more endorsers, guarantors,
either Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any directly or indirectly in respect thereof or hereof,
and may subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of either Borrower to creditors of such Borrower
other than the Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of either Borrower to the Creditors regardless of what
liabilities of such Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, any of the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement the Credit
Documents or any of such other instruments or agreements;
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive the Guarantor of its right to subrogation against either
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty; and/or
(i) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of the
Guarantor from its liabilities under this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a
6
legal or equitable discharge of a surety or guarantor except payment in full of
the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on the Guarantor
in any case shall entitle the Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Creditor to inquire into the capacity or
powers of the Borrower or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
9. The Guarantor hereby agrees with the Creditors that it will not
exercise any right of subrogation (whether contractual, under Section 509 of the
Bankruptcy Code, or otherwise) which it may at any time otherwise have either as
a result of payments made by it under this Guaranty or otherwise, until all
Guaranteed Obligations (for purposes of this Section 9, determined without
regard to any limitations on the aggregate amount guaranteed as provided in
Section 1 hereof) have been paid in full in cash.
10. The Guarantor waives any right to require the Creditors to: (i)
proceed against the Borrowers, any other guarantor, or any other party; or (ii)
proceed against or exhaust any security held from the Borrowers, any other
guarantor or any other party; or (iii) pursue any other remedy in the Creditors'
power whatsoever. The Guarantor waives any defense based on or arising out of
any defense of either Borrower, any other guarantor or any other party other
than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of either
Borrower, any other guarantor or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of either Borrower other than payment in full of the
Guaranteed Obligations. The Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent, the Syndication
Agent or the other Creditors by one or more judicial or nonjudicial sales, or
exercise any other right or remedy the Creditors may have against either
Borrower or any other party, or any security, without affecting or impairing in
any way the liability of the Guarantor hereunder except to the extent the
Guaranteed Obligations have been paid. The Guarantor waives any defense arising
out of any such election by the Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of the Guarantor against either Borrower or any other party or any
security.
7
11. The Creditors agree that this Guaranty may be enforced only by
the action of the Administrative Agent or the Collateral Agent, in each case
acting upon the instructions of the Required Banks and that no other Creditors
shall have any right individually to seek to enforce or to enforce this
Guaranty, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Collateral Agent for the benefit of
the Creditors upon the terms of this Guaranty.
12. In order to induce the Creditors to enter into the Credit
Agreement and to make the Loans and issue or participate in Letters of Credit
pursuant to the Credit Agreement, the Guarantor makes the following
representations, warranties and agreements:
(a) Corporate Existence and Power. The Guarantor and its Subsidiaries
-----------------------------
have been duly organized and are validly existing in good standing under
the laws of their respective jurisdictions of incorporation and are in good
standing or have applied for authority to operate as a foreign corporation
in all jurisdictions where the nature of their properties or business so
requires it and where a failure to be in good standing as a foreign
corporation would have a material adverse effect on the business, assets or
condition, financial or otherwise, of the Guarantor and its Subsidiaries
taken as a whole. The Guarantor and each of its Subsidiaries have the
corporate power to own their respective properties and carry on their
respective businesses as now being conducted, and in the case of the
Guarantor, to execute, deliver and perform its obligations under this
Guaranty and the other Credit Documents to which the Guarantor is a party.
(b) Corporate Authority and No Violation. The execution, delivery and
------------------------------------
performance by the Guarantor of this Guaranty and the other Credit
Documents to which it is a party (a) have been duly authorized by all
necessary corporate action on the part of the Guarantor, (b) will not
violate any provision of any Applicable Law (as defined in the HFS Credit
Agreement (as hereinafter defined) as in effect on the Effective Date)
(including any laws related to franchising) applicable to the Guarantor or
any of its Subsidiaries or any of their respective properties or assets,
(c) will not violate any provision of the Certificate of Incorporation or
By-Laws of the Guarantor or any of its Subsidiaries, or any indenture, any
agreement for borrowed money, any bond, note or other similar instrument or
any other material agreement to which the Guarantor or any of its
Subsidiaries is a party or by which the Guarantor or any of its
Subsidiaries or any of their respective properties or assets are bound, (d)
will not be in conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under, any material
indenture, agreement, bond, note or instrument and (e) will not result in
the creation or imposition of any Lien upon any property or assets of the
Guarantor or any of its Subsidiaries other than pursuant to this Guaranty
and the other Credit Documents to which the Guarantor is a party.
(c) Governmental and Other Approval and Consents. No action, consent
--------------------------------------------
or approval of, or registration or filing with, or any other action by, any
governmental
8
agency, bureau, commission or court is required in connection with the
execution, delivery and performance by the Guarantor of this Guaranty and
the other Credit Documents to which the Guarantor is a party.
(d) Litigation. There are no lawsuits or other proceedings pending
----------
(including, but not limited to, matters relating to environmental
liability), or, to the knowledge of the Guarantor, threatened, against or
affecting the Guarantor or any of its Subsidiaries or any of their
respective properties, by or before any Governmental Authority (as defined
in the HFS Credit Agreement as in effect on the Effective Date) or
arbitrator, which could reasonably be expected to have a material adverse
effect on the financial condition or the business of the Guarantor and its
Subsidiaries taken as a whole. Neither the Guarantor nor any of its
Subsidiaries is in default with respect to any order, writ, injunction,
decree, rule or regulation of any Governmental Authority, which default
would have a material adverse effect upon the financial condition or the
business of the Guarantor and its Subsidiaries taken as a whole.
(e) Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities.
-----------
(i) The consolidated statements of financial condition of the
Guarantor and its consolidated Subsidiaries at December 31, 1994 and
December 31, 1995 and the related consolidated statements of income, cash
flow and shareholders' equity of the Guarantor and its consolidated
Subsidiaries for the fiscal year ended on such date, as the case may be,
and set forth in the Guarantor's Forms 10-K for such periods and furnished
to the Creditors prior to the Effective Date, present fairly the
consolidated financial condition of the Guarantor and its consolidated
Subsidiaries at the date of such consolidated statements of financial
condition and the consolidated results of the operations of the Guarantor
and its consolidated Subsidiaries for the respective fiscal year. The
unaudited consolidated statement of financial condition of the Guarantor
and its consolidated Subsidiaries at June 30, 1996 and the related
unaudited consolidated statements of income, cash flow and shareholders'
equity of the Guarantor and its consolidated Subsidiaries for the six-month
period ended on such date, and set forth in the Guarantor's Form 10-Q for
such period and furnished to the Creditors prior to the Effective Date
present fairly the consolidated financial condition of the Guarantor and
its consolidated Subsidiaries at the date of such consolidated statement of
financial condition and the consolidated results of the operations of the
Guarantor and its consolidated Subsidiaries for such six-month period. All
such consolidated financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied,
subject, in the case of the consolidated financial statements at June 30,
1996, to normal year end audit adjustments. Since December 31, 1995, there
has been no material adverse change in the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Guarantor or of the Guarantor and its Subsidiaries taken as a whole.
9
(ii) On and as of the Initial Borrowing Date, after giving
effect to all Indebtedness (including the Revolving Loans) being incurred
or assumed and Liens created in connection therewith, (x) the sum of the
assets, at a fair valuation, of the Guarantor will exceed its debts, (y)
the Guarantor has not incurred and does not intend to incur, and does not
believe that it will incur, debts beyond its ability to pay such debts as
such debts mature and (z) the Guarantor has sufficient capital with which
to conduct its business. For purposes of this clause (e)(ii) "debt" means
any liability on a claim, and "claim" means (i) right to payment whether or
not such a right is reduced to judgment, liquidated, unliquidated. fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
(f) Taxes. The Guarantor and each of its Subsidiaries have filed or
-----
caused to be filed all federal, state and local tax returns which are
required to be filed, and have paid or have caused to be paid all taxes as
shown on said returns or on any assessment received by them in writing, to
the extent that such taxes have become due.
(g) Investment Company Act. The Guarantor is not an "investment
----------------------
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
(h) Public Utility Holding Company Act. Neither the Guarantor nor any
----------------------------------
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(i) HFS Credit Agreement. The Guarantor has delivered to the
--------------------
Administrative Agent and the other Creditors, true and correct copies of
the HFS Credit Agreement as in effect on the Effective Date.
(j) Incorporation by Reference. The Guarantor hereby makes each of
--------------------------
the representations and warranties contained in Sections 3.06 through 3.09,
inclusive, 3.15, 3.16, 3.19 and 3.20 of the HFS Credit Agreement, which
Sections, together with all definitions in the HFS Credit Agreement
applicable to such Sections, are hereby incorporated by reference as if set
forth herein in their entirety, provided that, all references to "Borrower"
--------
therein shall mean and be a reference to "the Guarantor" herein. No
amendment, modification or supplement to such representations or warranties
or definitions made to the HFS Credit Agreement shall be effective to amend
such representations and warranties or definitions as incorporated by
reference herein except as otherwise provided in Section 13(b) of this
Guaranty.
10
13. The Guarantor covenants and agrees that on and after the Initial
Borrowing Date and until the Total Revolving Loan Commitment has terminated and
the Loans and Notes, together with interest, Fees and all Guaranteed Obligations
are paid in full:
(a) Preservation of Existence: Compliance with Statutes, etc. The
--------------------------------------------------------
Guarantor will preserve and maintain its corporate existence and its
material rights, licenses, permits, franchises and privileges and comply,
and cause each of its Subsidiaries to comply, with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards
and controls), except such noncompliances as could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on
the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Guarantor or of the Guarantor and its
Subsidiaries taken as a whole.
(b) Incorporation by Reference. The Guarantor will comply with each
--------------------------
of the covenants contained in Sections 5 and 6 of the HFS Credit Agreement,
which Sections, together with all definitions in the HFS Credit Agreement
applicable to such Sections, are hereby incorporated by reference as if set
forth herein in their entirety, provided that:
--------
(i) all references to "Borrower" therein shall mean and be a
reference to "the Guarantor" herein;
(ii) all references to "Lender" therein shall mean and be a
reference to "Creditors" herein;
(iii) all references to the "Agent" or "Administrative Agent"
therein shall mean and be a reference to "Administrative
Agent" herein;
(iv) all references to the "Required Lenders" therein shall
mean and be a reference to "Required Banks" herein;
(v) all references to "this Agreement", "herein", "hereunder"
and words of similar import therein shall mean and be a
reference to this Guaranty;
(vi) all references to "Exhibit D hereto" therein shall mean
and be a reference to "Exhibit D to the HFS Credit
Agreement" herein;
(vii) all references to "Schedule 3.17 hereto" therein shall
mean and be a reference to "Schedule 3.17 to the HFS
Credit Agreement" herein;
11
(viii) all references to "Schedule 6.05 hereto" therein shall
mean and be a reference to "Schedule 6.05 to the HFS
Credit Agreement" herein;
(ix) Section 6.01 of the HFS Credit Agreement as incorporated
herein by reference shall include Indebtedness created
under the HFS Credit Agreement or any refinancing thereof
as permitted Indebtedness hereunder, so long as the
aggregate amount thereof is not increased above the
aggregate commitments under the HFS Credit Agreement as in
effect on the Effective Date;
(x) Section 6.05 of the HFS Credit Agreement as incorporated
herein by reference shall (a) be deemed to have the phrase
"unless all obligations of HFS under this Guaranty shall
be secured equally and ratably with the other obligations
secured by any such Lien on terms satisfactory to the
Agent and the Required Banks," inserted in the first line
thereof immediately after the phrase "Lien on its
property," appearing therein and (b) not pursuant to
clause (e) thereof, permit any Liens securing the HFS
Credit Agreement;
(xi) Section 6.12 of the HFS Credit Agreement as incorporated
herein by reference shall include the HFS Credit Agreement
and any refinancing thereof (provided that any such
refinancing shall not prohibit a negative pledge pursuant
to this Guaranty);
(xii) all references to "Fundamental Documents" therein shall
mean and be a reference to "Credit Documents" herein; and
(xiii) Paragraph (a) of Section 6.12 of the HFS Credit
Agreement shall be deemed modified by inserting at the end
thereof "provided, that the obligations of HFS under this
Guaranty and the other Credit Documents shall be secured
equally and ratably with the obligations of HFS under the
HFS Credit Agreement".
No amendment, modification or supplement to such covenants or definitions made
to the HFS Credit Agreement shall be effective to amend such covenants or
definitions as incorporated by reference herein without the prior consent of the
Administrative Agent and the Syndication Agent; provided, however, that the
Administrative Agent and the Syndication Agent will consider in good faith
suggested amendments, modifications or supplements to such covenants or
definitions to the extent that such amendment, modification or supplement is the
result of a refinancing of the HFS Credit Agreement; provided further, that if
--------
at the time of any such amendment, modification or supplement in connection with
a refinancing of the HFS Credit Agreement HFS' long-term senior unsecured debt
credit rating is at least BBB by S&P, then the provisions of Section 12(j)
hereof and this Section 13(b) will be deemed modified (without the consent of
any Person) to the extent necessary to incorporate by reference the respective
12
amendment, modification or supplement to the HFS Credit Agreement. In connection
with any amendment, modification or supplement to the HFS Credit Agreement which
will be incorporated herein by reference, the Banks hereby authorize the
Administrative Agent and the Syndication Agent to enter into an appropriate
amendment to this Guaranty to reflect such amendment, modification or
supplement.
As used in this Guaranty, the term "HFS Credit Agreement" shall mean
the Competitive Advance and Revolving Credit Agreement, dated as of December 16,
1993 among HFS, the lenders named therein and The Chase Manhattan Bank (as
successor to Chemical Bank), as Administrative Agent, as in effect on the
Effective Date and as amended, modified, supplemented or refinanced from time to
time in accordance with the provisions of this Guaranty.
14. The occurrence of any of the following specified events shall
constitute a "Guarantor Event of Default" hereunder:
(a) Payments. The Guarantor shall fail to pay when due any amounts
--------
owing by it hereunder; or
(b) Representations, etc. Any representation, warranty or statement
--------------------
made by the Guarantor herein or in any certificate delivered pursuant
hereto shall prove to be untrue or inaccurate in any material respect on
the date as of which made or deemed made; or
(c) Covenant. Default shall be made by the Guarantor in the due
--------
observance or performance of any other covenant, condition or agreement to
be observed or performed pursuant to the terms of this Guaranty, the HFS
Credit Agreement or any other Fundamental Document (as defined in the HFS
Credit Agreement) and such default shall continue unremedied for thirty
(30) days after the Guarantor obtains knowledge of such occurrence; or
(d) Bankruptcy, etc. The Guarantor or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under the "Bankruptcy Code"; or
an involuntary case is commenced against the Guarantor or any of its
Subsidiaries and the petition is not controverted within 10 days, or is not
dismissed within 60 days, after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge of,
all or substantially all of the property of the Guarantor or any of its
Subsidiaries, or the Guarantor or any of its Subsidiaries commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction whether now or hereafter in effect relating to the
Guarantor or any of its Subsidiaries, or there is commenced against the
Guarantor or any of its Subsidiaries any such proceeding which remains
undismissed for a period of 60 days, or the Guarantor or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order
13
or relief or other order approving any such case or proceeding is entered;
or the Guarantor or any of its Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or the Guarantor
or any of its Subsidiaries makes a general assignment for the benefit of
creditors; or any partnership and/or corporate action is taken by the
Guarantor or any of its Subsidiaries for the purpose of effecting any of
the foregoing; or
(e) Judgments. One or more judgments or decrees shall be entered
---------
against the Guarantor or any of its Subsidiaries involving in the aggregate
for the Guarantor and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments
and decrees either shall be final and non-appealable or shall not be
vacated, discharged or stayed or bonded pending appeal for any period of 30
consecutive days, and the aggregate amount of all such judgments exceeds
$1,000,000; or
(f) [INTENTIONALLY OMITTED]
15. The Guarantor hereby agrees to pay all out-of-pocket costs and
expenses of the Administrative Agent and the Syndication Agent in connection
with any amendment, waiver or consent relating hereto, and of each Creditor in
connection with the enforcement of this Guaranty (including in each case,
without limitation, the fees and disbursements of counsel employed by any Agent
or any of the other Creditors).
16. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
17. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the
Guarantor and with the written consent of the Required Banks (or to the extent
required by Section 14.12 of the Credit Agreement, with the written consent of
each Bank).
18. The Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents in existence on the date hereof has been made
available to the Guarantor and the Guarantor is familiar with the contents
thereof.
19. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of any Event of Default, each Creditor
is hereby authorized at any time or from time to time, without notice to the
Guarantor or to any other Person (provided that at least 10 days' prior written
notice shall have been given to the Company and the Guarantor of the respective
non-payment
14
of Guaranteed Obligations, unless a Default or an Event of Default exists with
respect to either Borrower pursuant to Section 11.05 of the Credit Agreement or
a Guarantor Event of Default (or an event which, with the passage of time, would
be a Guarantor Event of Default) exists with respect to the Guarantor pursuant
to Section 14(d) hereof or the maturity of the Loans has been accelerated
pursuant to Section 11 of the Credit Agreement), any such notice (except to the
extent required pursuant to the immediately preceding parenthetical) being
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other indebtedness at any time held or owing by
such Creditor to or for the credit or the account of the Guarantor, against and
on account of the obligations and liabilities of the Guarantor to such Creditor
under this Guaranty, irrespective of whether or not such Creditor shall have
made any demand hereunder and although said obligations, liabilities, deposits
or claims, or any of them, shall be contingent or unmatured.
20. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Creditor, as provided in the Credit Agreement and (ii) in
the case of the Guarantor, at its address set forth opposite its signature
below.
21. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including either Borrower), then and in such event the
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon the Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of either Borrower, and the Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
22. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS
AND THE GUARANTOR SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this
Guaranty or any other Credit Document to which the Guarantor is a party may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Guaranty, the Guarantor hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Guarantor hereby further irrevocably waives any claim
that any such courts lack jurisdiction over the Guarantor, and agrees not to
plead or claim, in any legal action or proceeding with respect to this Guaranty
or any other Credit Document to which the Guarantor is a party brought in any of
the aforesaid courts, that any such court lacks jurisdiction over the
15
Guarantor. The Guarantor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Guarantor at its address set forth opposite its signature below, such
service to become effective 30 days after such mailing. The Guarantor hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any of the Creditors to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction.
(B) The Guarantor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty brought in the
courts referred to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that such action or proceeding
brought in any such court has been brought in an inconvenient forum.
(C) THE GUARANTOR AND EACH CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS
OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY,
THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantor and the Administrative
Agent.
24. All payments made by the Guarantor hereunder will be made without
setoff, counterclaim, deduction or other defense.
25. Notwithstanding anything to the contrary contained above in this
Guaranty, it is understood and agreed by the parties hereto that, to the extent
(and only to the extent) expressly provided in Section 2.06 of the HFS
Subordination Agreement, certain amendments to the Credit Agreement shall, to
the extent provided in said Section 2.06, require the consent of the Guarantor.
26. Payments by the Guarantor under this Guaranty shall be made in
Dollars, notwithstanding the Currency in which the Guaranteed Obligations are
denominated. To the extent that any such payment in Dollars is to be applied to
the payment of a Guaranteed Obligation denominated in Canadian Dollars, Dollars
paid under this Guaranty shall be converted by the Administrative Agent into
Canadian Dollars in accordance with the Credit Agreement.
* * *
16
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address: HFS INCORPORATED
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000 By:_______________________
Facsimile No.: (000) 000-0000 Name:
Attention: Xxxxx X. Xxxxxxx Title:
Accepted and Agreed to:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as
Collateral Agent
By:_______________________
Name:
Title:
Exhibit G-2
EXECUTION COPY
--------------
SUBSIDIARIES GUARANTY
---------------------
GUARANTY, dated as of August 28, 1996 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned (each a "Guarantor" and, together with any other entity that becomes
a party hereto pursuant to Section 26 hereof, the "Guarantors"). Except as
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
-------------------
WHEREAS, Chartwell Leisure Inc. (the "Company"), Chartwell Canada
Corp. (the "Canadian Borrower" and, together with the Company, the "Borrowers"),
various lenders from time to time party thereto (the "Banks"), The Bank of Nova
Scotia, as Syndication Agent (the "Syndication Agent"), and The Chase Manhattan
Bank, as Administrative Agent (together with any successor administrative agent,
the "Administrative Agent"), have entered into the Credit Agreement, dated as of
August 28, 1996, providing for the making of Loans and the issuance of, and
participation in, Letters of Credit, as contemplated therein (as used herein,
the term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced or
supplemented from time to time, and including any agreement extending the
maturity of, or restructuring all or any portion of the Indebtedness under such
agreement or any successor agreement) (the Banks, the Syndication Agent, the
Administrative Agent and the Collateral Agent are herein called the "Bank
Creditors");
WHEREAS, each Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
with one or more Banks or any affiliate thereof (each such Bank or affiliate,
even if the respective Bank subsequently ceases to be a Bank under the Credit
Agreement for any reason, together with such Bank's or affiliate's successors
and assigns, if any, collectively, the "Other Creditors," and together with the
Bank Creditors, the "Secured Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of the
Company;
WHEREAS, it is a condition to the making of Loans and the issuance of
Letters of Credit under the Credit Agreement that each Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, desires
2
to execute this Guaranty in order to satisfy the conditions described in the
preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Secured Creditors and hereby covenants and agrees with each
Secured Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Notes issued by, and the Loans made
to, each Borrower under the Credit Agreement, and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit issued under the Credit
Agreement and (y) all other obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities owing by each Borrower to the Bank Creditors under the
Credit Agreement or any other Credit Document to which either Borrower is a
party (including, without limitation, indemnities, Fees and interest thereon),
whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any such other Credit Document and the
due performance and compliance by each Borrower with all of the terms,
conditions and agreements contained in the Credit Documents (all such principal,
interest, liabilities and obligations being herein collectively called the
"Credit Document Obligations"); and (ii) to each Other Creditor the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities owing by each Borrower under any Interest Rate Protection
Agreement or Other Hedging Agreement, whether now in existence or hereafter
arising, and the due performance and compliance by each Borrower with all of the
terms, conditions and agreements contained in the Interest Rate Protection
Agreements or Other Hedging Agreements (all such obligations and liabilities
being herein collectively called the "Other Obligations," and together with the
Credit Document Obligations, the "Guaranteed Obligations"). Each Guarantor
understands, agrees and confirms that the Secured Creditors may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such
Guarantor without proceeding against any other Guarantor, either Borrower,
against any security for the Guaranteed Obligations, or under any other guaranty
covering all or a portion of the Guaranteed Obligations.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations whether or not due or payable by either Borrower upon the
occurrence in respect of either Borrower of any of the events specified in
Section 11.05 of the Credit Agreement, and unconditionally and irrevocably,
jointly and severally, promises to pay such Guaranteed Obligations to the
Secured Creditors, or order, on demand, in lawful money of the United States or
other Currency in which the Guaranteed Obligations are denominated. This
Guaranty shall constitute a guaranty of payment and performance, and not of
collection.
3
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of either
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by any circumstance or occurrence whatsoever,
including, without limitation: (a) any direction as to application of payment by
either Borrower or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the Guaranteed Obligations, (c) any payment on or in reduction of any such
other guaranty or undertaking, (d) any dissolution, termination or increase,
decrease or change in personnel by either Borrower, (e) any payment made to any
Secured Creditor on the indebtedness which any Secured Creditor repays either
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding, (f) any action or inaction by the Secured Creditors as
contemplated in Section 6 hereof, or (g) any invalidity, irregularity or
unenforceability of all or part of the Guaranteed Obligations or of any security
therefor.
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor or either Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or either Borrower and whether or not any other Guarantor, any
other guarantor of either Borrower or either Borrower be joined in any such
action or actions. Each Guarantor waives, to the fullest extent permitted by
law, the benefit of any statute of limitations affecting its liability hereunder
or the enforcement thereof. Any payment by either Borrower or other
circumstance which operates to toll any statute of limitations as to either
Borrower shall operate to toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Secured Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other Guarantor or
any other guarantor or either Borrower).
6. Any Secured Creditor may at any time and from time to time without
the consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the
4
guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against either
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrowers or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of either
Borrower other than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of either Borrower to the Secured Creditors
regardless of what liabilities of the Borrowers remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, any of the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements; and/or
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
5
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Secured Creditor would otherwise have. No notice
to or demand on any Guarantor in any case shall entitle such Guarantor to any
other further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Secured Creditor to any other or further action in
any circumstances without notice or demand. It is not necessary for any Secured
Creditor to inquire into the capacity or powers of the Borrowers or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
9. Any indebtedness of each Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of such Borrower to the
Secured Creditors, and such indebtedness of such Borrower to any Guarantor, if
the Administrative Agent, after an Event of Default has occurred, so requests,
shall be collected, enforced and received by such Guarantor as trustee for the
Secured Creditors and be paid over to the Secured Creditors on account of the
indebtedness of such Borrower to the Secured Creditors, but without affecting or
impairing in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Prior to the transfer by any Guarantor of any note
or negotiable instrument evidencing any indebtedness of either Borrower to such
Guarantor, such Guarantor shall xxxx such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Secured Creditors to:
(i) proceed against the Borrowers, any other Guarantor, any other guarantor of
the Guaranteed Obligations or any other party; (ii) proceed against or exhaust
any security held from the Borrowers, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party; or (iii) pursue any other
remedy in the Secured Creditors' power whatsoever. Each Guarantor waives any
defense based on or arising out of any defense of either Borrower, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party
other than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of either
Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations
or any other party, or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
either Borrower other than payment in full of the Guaranteed
6
Obligations. The Secured Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent, the Syndication
Agent or the other Secured Creditors by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable
(to the extent such sale is permitted by applicable law), or exercise any other
right or remedy the Secured Creditors may have against either Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid in full. Each Guarantor waives any defense arising
out of any such election by the Secured Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against either Borrower or any other
party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of each Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. It is the desire and intent of each Guarantor and the Secured
Creditors that this Guaranty shall be enforced against each Guarantor to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of each Guarantor under this Guaranty shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the amount of the Guaranteed Obligations shall
be deemed (for purposes of this Guaranty only) to be reduced and such Guarantor
shall pay the maximum amount of the Guaranteed Obligations which would be
permissible under applicable law.
12. The Secured Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Banks (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least a majority of the outstanding Other Obligations) and that no other Secured
Creditors shall have any right individually to seek to enforce or to enforce
this Guaranty or to realize upon the security to be granted by the Security
Documents, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Collateral Agent or the holders of
at least a majority of the outstanding Other Obligations, as the case may be,
for the benefit of the Secured Creditors upon the terms of this Guaranty and the
Pledge Agreement. The Secured Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee, or stockholder of any
guarantor (except to the extent such stockholder is also a Guarantor hereunder).
7
13. In order to induce the Banks to make Loans and issue or
participate in Letters of Credit pursuant to the Credit Agreement, and in order
to induce the Other Creditors to execute, deliver and perform the Interest Rate
Protection Agreements or Other Hedging Agreements, each Guarantor represents,
warrants and covenants that:
(a) Such Guarantor (i) is a duly organized and validly existing partnership
or corporation, as the case may be, in good standing (if applicable) under the
laws of the jurisdiction of its organization, (ii) has the partnership or
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in each
jurisdiction where the conduct of its business requires such qualification
except for failures to be so qualified which, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
(b) Such Guarantor has the partnership or corporate power and authority to
execute, deliver and perform the terms and provisions of this Guaranty and each
other Credit Document to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
each such Credit Document. Such Guarantor has duly executed and delivered this
Guaranty and each other Credit Document to which it is a party, and each such
Credit Document constitutes the legal, valid and binding obligation of such
Guarantor enforceable in accordance with its terms.
(c) Neither the execution, delivery or performance by such Guarantor of
this Guaranty or any other Credit Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof, (i) will
contravene any provision of any applicable law, statute, rule or regulation, or
any applicable order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the property or
assets of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement, or any
other material agreement or other instrument to which such Guarantor or any of
its Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
certificate of incorporation or by-laws (or equivalent organizational documents)
of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with (except as have been obtained or made
prior to the Initial Borrowing Date), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of this Guaranty or any other Credit Document to which
8
such Guarantor is a party or (ii) the legality, validity, binding effect or
enforceability of this Guaranty or any other Credit Document to which such
Guarantor is a party.
(e) There are no actions, suits or proceedings (private or governmental)
pending or threatened (i) with respect to any Credit Documents to which such
Guarantor is a party or (ii) with respect to such Guarantor that could
reasonably be expected to materially and adversely affect (a) the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole or (b) the rights
or remedies of the Secured Creditors or on the ability of such Guarantor to
perform its respective obligations to the Secured Creditors hereunder and under
the other Credit Documents to which it is a party.
14. Each Guarantor covenants and agrees that, on and after the date
hereof and until the termination of the Total Revolving Loan Commitment and all
Interest Rate Protection Agreements or Other Hedging Agreements, and when no
Note or Letter of Credit remains outstanding and all Guaranteed Obligations have
been paid in full, such Guarantor will take, or will refrain from taking, as the
case may be, all actions that are necessary to be taken or not taken so that no
violation of any provision, covenant or agreement contained in Section 9 or 10
of the Credit Agreement occurs so that no Default or Event of Default is caused
by the actions of such Guarantor or any of its Subsidiaries.
15. The Guarantors hereby jointly and severally agree to pay all out-
of-pocket costs and expenses of the Agents in connection with any amendment,
waiver or consent relating hereto, and of each Secured Creditor in connection
with any enforcement of this Guaranty (including in each case, without
limitation, the fees and disbursements of counsel employed by any Agent or any
of the other Secured Creditors).
16. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns.
17. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and with the written consent of either (x)
the Required Banks (or to the extent required by Section 14.12 of the Credit
Agreement, with the written consent of each Bank) at all times prior to the time
on which all Credit Document Obligations have been paid in full or (y) the
holders of at least a majority of the outstanding Other Obligations at all times
after the time on which all Credit Document Obligations have been paid in full;
provided, that any change, waiver, modification or variance affecting the rights
--------
and benefits of a single Class (as defined below) of Secured Creditors (and not
all Secured Creditors in a like or similar manner) shall also require the
written consent of the Requisite Creditors (as defined below) of such Class of
Secured Creditors (it being understood that the addition or release of any
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released). For the purpose of this Guaranty the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Bank Creditors as holders of
the Credit Document Obligations or (y) the Other Creditors as the holders of the
Other
9
Obligations. For the purpose of this Guaranty, the term "Requisite Creditors" of
any Class shall mean (x) with respect to the Credit Document Obligations, the
Required Banks (or to the extent required by Section 14.12 of the Credit
Agreement, with the written consent of each Bank) and (y) with respect to the
Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection or Other
Hedging Agreements.
18. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
19. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default
(such term to mean and include any "Event of Default" as defined in the Credit
Agreement or any payment default under any Interest Rate Protection Agreement or
Other Hedging Agreement continuing after any applicable grace period), each
Secured Creditor is hereby authorized at any time or from time to time, without
notice to any Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Creditor to or for the credit or the account of such Guarantor, against and on
account of the obligations and liabilities of such Guarantor to such Secured
Creditor under this Guaranty, irrespective of whether or not such Secured
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured.
20. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantors; or in any case at
such other address as any of the Persons listed above may hereafter notify the
others in writing.
21. If claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrowers), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of either Borrower, and such Guarantor
shall be and remain
10
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
22. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
any Guarantor is a party may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Guaranty, each Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor
hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such Guarantor, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Guaranty or any other Credit Document
to which such guarantor is a party brought in any of the aforesaid courts, that
any such court lacks jurisdiction over such Guarantor. Each Guarantor further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such Guarantor at its address
set forth opposite its signature below, such service to become effective 30 days
after such mailing. Each Guarantor hereby irrevocably waives any objection to
such service of process and further irrevocably waives and agrees not to plead
or claim in any action or proceeding commenced hereunder or under any other
Credit Document to which such Guarantor is a party that service of process was
in any invalid or ineffective. Nothing herein shall affect the right of any of
the Secured Creditors to serve process in any other manner permitted by law or
to continence legal proceedings or otherwise proceed against each Guarantor in
any other jurisdiction.
(B) Each Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (a) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that such action or proceeding brought
in any such court has been brought in an inconvenient forum.
(C) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF
THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
23. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 10.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 14.12 of the Credit Agreement)) and the
11
proceeds of such sale, disposition or liquidation are applied in accordance with
the provisions of the Credit Agreement, to the extent applicable, such Guarantor
shall be released from this Guaranty and this Guaranty shall, as to each such
Guarantor or Guarantors, terminate, and have no further force or effect (it
being understood and agreed that the sale of one or more Persons that own,
directly or indirectly, all of the capital stock or partnership interests of any
Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this Section 23); provided that in no event shall the Canadian Borrower be
--------
released from this Guaranty pursuant to this Section 23.
24. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
25. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense and on the same basis as payments are made
by the Borrowers under Sections 4.03 and 4.04 of the Credit Agreement.
26. It is understood and agreed that any Subsidiary of the Company
that is required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Administrative Agent.
27. (a) If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in one Currency into another Currency,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase the first currency
with such other currency on the Business Day preceding the day on which final
judgment is given.
(b) The obligation of a Guarantor in respect of any sum due to any
Secured Creditor hereunder shall, notwithstanding any judgment in or receipt of
a currency (the "Alternate Currency") other than that in which such sum is
------------------
denominated in accordance with the applicable provisions of this Agreement or
the other Credit Documents (the "Agreement Currency"), be discharged only to the
------------------
extent that on the Business Day following receipt by such Secured Creditor of
any such sum so due in the Alternate Currency such Secured Creditor may in
accordance with normal banking procedures purchase the Agreement Currency with
the Alternate Currency; if the amount of the Agreement Currency so purchased is
less than the sum originally due to such Secured Creditor in the Agreement
Currency, each Guarantor agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify such Secured Creditor against such loss, and if
the amount of the Agreement Currency so purchased exceeds the sum originally due
to such Secured Creditor, such Secured Creditor agrees to remit to the
applicable Guarantor such excess.
* * *
12
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Addresses
---------
000 Xxxxx Xxxxxx XXXXXXXX XXXXXXXXXX GAMING, INC.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx KEYSTONE ERIE GAMING, INC.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx NATIONAL GAMING MISSISSIPPI, INC.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx By:___________________________
Name:
Title:
000 Xxxxx Xxxxxx XXXXXXXXX XXXXXX CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
c/o Chartwell Leisure Inc. CHARTWELL LODGING INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000 By:___________________________
Telecopier No.: (000) 000-0000 Name:
Attention: Xxxxxxx Xxxxx Title:
13
000 Xxxxx Xxxxxx XXXXXXXXX XXXXXX CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx BEAR FINANCIAL CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx XX XXXXX INC.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx XXXXXXXXX XXXXXXXXX CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx CHARTWELL SANTA FE CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx XXXXXXXXX XXXXXXXXXXX CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
14
000 Xxxxx Xxxxxx XXXXXXXXX XXXXXXXXX CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx NATIONAL LODGING CORP.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx NL/SAN DIEGO INC.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx TRAVEL BEVERAGES, INC.
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:___________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
Accepted and Agreed to:
THE CHASE MANHATTAN BANK,
as Administrative Agent
and Collateral Agent
By:________________________
Name:
Title:
Exhibit G-3
EXECUTION COPY
--------------
COMPANY GUARANTY
----------------
GUARANTY, dated as of August 28, 1996 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by Chartwell Leisure
Inc., a Delaware corporation (the "Guarantor"). Except as otherwise defined
herein, capitalized terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H :
---------------------
WHEREAS, the Guarantor, Chartwell Canada Corp. (the "Canadian
Borrower"), various lenders from time to time party thereto (the "Banks"), The
Bank of Nova Scotia, as Syndication Agent (the "Syndication Agent"), and The
Chase Manhattan Bank, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"), have entered into the Credit
Agreement, dated as of August 28, 1996, providing for the making of Loans and
the issuance of, and participation in, Letters of Credit, as contemplated
therein (as used herein, the term "Credit Agreement" means the Credit Agreement
described above in this paragraph, as the same may be amended, modified,
extended, renewed, replaced or supplemented from time to time, and including any
agreement extending the maturity of, or restructuring all or any portion of the
Indebtedness under such agreement or any successor agreement) (the Banks, the
Syndication Agent, the Administrative Agent and the Collateral Agent are herein
called the "Bank Creditors");
WHEREAS, the Canadian Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Banks or any affiliate thereof (each such Bank or
affiliate, even if the respective Bank subsequently ceases to be a Bank under
the Credit Agreement for any reason, together with such Bank's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors," and
together with the Bank Creditors, the "Secured Creditors");
WHEREAS, the Canadian Borrower is a direct or indirect Subsidiary of
the Guarantor;
WHEREAS, it is a condition to the making of Loans and the issuance of
Letters of Credit under the Credit Agreement that the Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, the Guarantor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, desires
Page 2
to execute this Guaranty in order to satisfy the conditions described in the
preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Secured Creditors and hereby covenants and agrees with each
Secured Creditor as follows:
1. The Guarantor irrevocably and unconditionally guarantees: (i) to
the Bank Creditors the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of (x) the principal of and interest on
the Revolving Notes issued by, and the Revolving Loans made to, the Canadian
Borrower under the Credit Agreement, and all reimbursement obligations and
Unpaid Drawings with respect to Letters of Credit issued under the Credit
Agreement and (y) all other obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities owing by the Canadian Borrower to the Bank Creditors under
the Credit Agreement or any other Credit Document to which the Canadian Borrower
is a party (including, without limitation, indemnities, Fees and interest
thereon), whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any such other Credit Document and the
due performance and compliance by the Canadian Borrower with all of the terms,
conditions and agreements contained in the Credit Documents (all such principal,
interest, liabilities and obligations being herein collectively called the
"Credit Document Obligations"); and (ii) to each Other Creditor the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities owing by the Canadian Borrower under any Interest Rate
Protection Agreement or Other Hedging Agreement, whether now in existence or
hereafter arising, and the due performance and compliance by the Canadian
Borrower with all of the terms, conditions and agreements contained in the
Interest Rate Protection Agreements or Other Hedging Agreements (all such
obligations and liabilities being herein collectively called the "Other
Obligations," and together with the Credit Document Obligations, the "Guaranteed
Obligations"). The Guarantor understands, agrees and confirms that the Secured
Creditors may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against the Guarantor without proceeding against the Canadian
Borrower, against any security for the Guaranteed Obligations, or under any
other guaranty covering all or a portion of the Guaranteed Obligations.
2. Additionally, the Guarantor unconditionally and irrevocably
guarantees the payment of any and all Guaranteed Obligations whether or not due
or payable by the Canadian Borrower upon the occurrence in respect of the
Canadian Borrower of any of the events specified in Section 11.05 of the Credit
Agreement, and unconditionally and irrevocably promises to pay such Guaranteed
Obligations to the Secured Creditors, or order, on demand, in lawful money of
the United States. This Guaranty shall constitute a guaranty of payment and
performance, and not of collection.
Page 3
3. The liability of the Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Canadian Borrower whether executed by the Guarantor, any other guarantor or by
any other party, and the liability of the Guarantor hereunder shall not be
affected or impaired by any circumstance or occurrence whatsoever, including,
without limitation: (a) any direction as to application of payment by the
Canadian Borrower or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the Guaranteed Obligations, (c) any payment on or in reduction of any such
other guaranty or undertaking, (d) any dissolution, termination or increase,
decrease or change in personnel by the Canadian Borrower, (e) any payment made
to any Secured Creditor on the indebtedness which any Secured Creditor repays
the Canadian Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and the Guarantor
waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding, (f) any action or inaction by the Secured
Creditors as contemplated in Section 6 hereof, or (g) any invalidity,
irregularity or unenforceability of all or part of the Guaranteed Obligations or
of any security therefor.
4. The obligations of the Guarantor hereunder are independent of the
obligations of any other guarantor or the Canadian Borrower, and a separate
action or actions may be brought and prosecuted against the Guarantor whether or
not action is brought against any other guarantor or the Canadian Borrower and
whether or not any other guarantor of the Canadian Borrower or the Canadian
Borrower be joined in any such action or actions. The Guarantor waives, to the
fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by
the Canadian Borrower or other circumstance which operates to toll any statute
of limitations as to the Canadian Borrower shall operate to toll the statute of
limitations as to the Guarantor.
5. The Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Secured Creditor against, and any other notice
to, any party liable thereon (including the Guarantor, any other guarantor or
the Canadian Borrower).
6. Any Secured Creditor may at any time and from time to time without
the consent of, or notice to, the Guarantor, without incurring responsibility to
the Guarantor, without impairing or releasing the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
Page 4
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Canadian Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Canadian Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Canadian Borrower to creditors of the
Canadian Borrower other than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Canadian Borrower to the Secured Creditors
regardless of what liabilities of the Canadian Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, any of the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements; and/or
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive the Guarantor of its right to subrogation against the
Canadian Borrower to recover full indemnity for any payments made pursuant
to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or
Page 5
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly specified are cumulative and
not exclusive of any rights or remedies which any Secured Creditor would
otherwise have. No notice to or demand on the Guarantor in any case shall
entitle the Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Secured Creditor to
any other or further action in any circumstances without notice or demand. It is
not necessary for any Secured Creditor to inquire into the capacity or powers of
the Canadian Borrower or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
9. Any indebtedness of the Canadian Borrower now or hereafter held by
the Guarantor is hereby subordinated to the indebtedness of the Canadian
Borrower to the Secured Creditors, and such indebtedness of the Canadian
Borrower to the Guarantor, if the Administrative Agent, after an Event of
Default has occurred, so requests, shall be collected, enforced and received by
the Guarantor as trustee for the Secured Creditors and be paid over to the
Secured Creditors on account of the indebtedness of the Canadian Borrower to the
Secured Creditors, but without affecting or impairing in any manner the
liability of the Guarantor under the other provisions of this Guaranty. Prior
to the transfer by the Guarantor of any note or negotiable instrument evidencing
any indebtedness of the Canadian Borrower to the Guarantor, the Guarantor shall
xxxx such note or negotiable instrument with a legend that the same is subject
to this subordination. Without limiting the generality of the foregoing, the
Guarantor hereby agrees with the Secured Creditors that it will not exercise any
right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
10. (a) The Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Secured Creditors to:
(i) proceed against the Canadian Borrower, any other guarantor of the Guaranteed
Obligations or any other party; (ii) proceed against or exhaust any security
held from the Canadian Borrower, any other guarantor of the Guaranteed
Obligations or any other party; or (iii) pursue any other remedy in the Secured
Creditors' power whatsoever. The Guarantor waives any defense based on or
arising out of any defense of the Canadian Borrower, any other guarantor of the
Guaranteed Obligations or any other party other than payment in full of the
Guaranteed Obligations, including, without limitation, any defense based on or
arising out of the disability of the Canadian Borrower, any other guarantor of
the Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Canadian Borrower other than payment in full
of the Guaranteed Obligations. The Secured Creditors may, at their election,
foreclose on any security held by the Administrative Agent, the Collateral
Agent, the Syndication Agent or the other Secured Creditors by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Secured
Page 6
Creditors may have against the Canadian Borrower or any other party, or any
security, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid in full. The Guarantor waives any defense arising out of any such election
by the Secured Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
the Guarantor against the Canadian Borrower or any other party or any security.
(b) The Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. The Guarantor assumes all responsibility for being and keeping
itself informed of the Canadian Borrower's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which the Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise the Guarantor of information known to them regarding such
circumstances or risks.
11. It is the desire and intent of the Guarantor and the Secured
Creditors that this Guaranty shall be enforced against the Guarantor to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of the Guarantor under this Guaranty shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the amount of the Guaranteed Obligations shall
be deemed (for purposes of this Guaranty only) to be reduced and the Guarantor
shall pay the maximum amount of the Guaranteed Obligations which would be
permissible under applicable law.
12. The Secured Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Banks (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least a majority of the outstanding Other Obligations) and that no other Secured
Creditors shall have any right individually to seek to enforce or to enforce
this Guaranty or to realize upon the security to be granted by the Pledge
Agreement, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Collateral Agent or the holders of
at least a majority of the outstanding Other Obligations, as the case may be,
for the benefit of the Secured Creditors upon the terms of this Guaranty and the
Pledge Agreement. The Secured Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee, or stockholder of any
guarantor (except to the extent such stockholder is also a Guarantor hereunder).
13. The Guarantor hereby agrees to pay all out-of-pocket costs and
expenses of the Administrative Agent in connection with any amendment, waiver or
consent relating hereto, and of each Secured Creditor in connection with any
enforcement of this Guaranty
Page 7
(including in each case, without limitation, the fees and disbursements of
counsel employed by any Administrative Agent or any of the other Secured
Creditors).
14. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the
Guarantor and with the written consent of either (x) the Required Banks (or to
the extent required by Section 14.12 of the Credit Agreement, with the written
consent of each Bank) at all times prior to the time on which all Credit
Document Obligations have been paid in full or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time on
which all Credit Document Obligations have been paid in full; provided, that any
--------
change, waiver, modification or variance affecting the rights and benefits of a
single Class (as defined below) of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall also require the written consent of
the Requisite Creditors (as defined below) of such Class of Secured Creditors.
For the purpose of this Guaranty the term "Class" shall mean each class of
Secured Creditors, i.e., whether (x) the Bank Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Guaranty, the term "Requisite Creditors"
of any Class shall mean (x) with respect to the Credit Document Obligations, the
Required Banks (or to the extent required by Section 14.12 of the Credit
Agreement, with the written consent of each Bank) and (y) with respect to the
Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection or Other
Hedging Agreements.
16. The Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default
(such term to mean and include any "Event of Default" as defined in the Credit
Agreement or any payment default under any Interest Rate Protection Agreement or
Other Hedging Agreement continuing after any applicable grace period), each
Secured Creditor is hereby authorized at any time or from time to time, without
notice to the Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Creditor to or for the credit or the account of the Guarantor, against and on
account of the obligations and liabilities of the Guarantor to such Secured
Creditor under this Guaranty, irrespective of whether or not such Secured
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured.
Page 8
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of the Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the Persons listed above may hereafter notify the
others in writing.
19. If claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Canadian Borrower), then and in such event
the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon the Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Canadian Borrower,
and the Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
the Guarantor is a party may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Guaranty, the Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Guarantor hereby
further irrevocably waives any claim that any such courts lack jurisdiction over
the Guarantor, and agrees not to plead or claim, in any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
the Guarantor is a party brought in any of the aforesaid courts, that any such
court lacks jurisdiction over the Guarantor. The Guarantor further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Guarantor at its address set forth
opposite its signature below, such service to become effective 30 days after
such mailing. The Guarantor hereby irrevocably waives any objection to such
service of process and further irrevocably waives and agrees not to plead or
claim in any action or proceeding commenced hereunder or under any other Credit
Document to which the Guarantor is a party that service of process was in any
invalid or ineffective. Nothing herein shall affect the right of any of the
Secured Creditors to serve process in any other manner permitted by law or to
continence legal proceedings or otherwise proceed against the Guarantor in any
other jurisdiction.
Page 9
(b) The Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which the Guarantor is a party brought in the courts referred
to in clause (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(C) THE GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVE ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION. PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
21. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantor and the Administrative
Agent.
22. All payments made by the Guarantor hereunder will be made without
setoff, counterclaim or other defense and on the same basis as payments are made
by the Canadian Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
000 Xxxxx Xxxxxx CHARTWELL LEISURE INC.
Xxx Xxxx, Xxx Xxxx 00000
By:________________________
Name: Xxxxxx Xxxxxxx
Title: President
Accepted and Agreed to:
THE CHASE MANHATTAN BANK,
as Administrative Agent
and Collateral Agent
By:________________________
Name:
Title:
EXHIBIT H
---------
OFFICER'S SOLVENCY CERTIFICATE
------------------------------
I, the undersigned, the Chief Financial Officer of CHARTWELL LEISURE
INC., a Delaware corporation (the "Borrower"), do hereby certify that:
1. This Certificate is furnished pursuant to Section 5.11(i) of the
Credit Agreement, dated as of August 28, 1996 among the Company, Chartwell
Canada Corp. (the "Canadian Borrower"), the lenders from time to time party
thereto (the "Banks"), The Bank of Nova Scotia, as Syndication Agent, and The
Chase Manhattan Bank, as Administrative Agent (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of each of the
Company and its Subsidiaries taken as a whole and of the Canadian
Borrower would change hands between a willing buyer and a willing
seller, within a commercially reasonable period of time, each having
reasonable knowledge of the relevant facts, with neither being under
any compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing seller
from an independent willing buyer if the assets of each of the Company
and its Subsidiaries taken as a whole and of the Canadian Borrower are
sold with reasonable promptness under normal selling conditions in a
current market.
(c) "New Financing"
The Indebtedness incurred or to be incurred by the Borrowers and the
Subsidiary Guarantors under the Credit Documents (assuming the full
utilization by the Borrowers of the Total Revolving Loan Commitment
and the Total Revolving C$ Loan Commitment under the Credit Agreement)
and all other financings contemplated by the Documents, in each case
after giving effect to the Transaction and the incurrence of all
financings contemplated therewith.
2
(d) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that would
be recorded in accordance with generally accepted accounting
principles, consistently applied ("GAAP"), of each of the Company and
its Subsidiaries (taken as a whole) and of the Canadian Borrower at
each of the date hereof, the Initial Borrowing Date and the Second
Borrowing Date, in each case after giving effect to the Transaction
and the incurrence of all financings contemplated therewith, together
with the amount of all New Financing.
(e) "Contingent Liabilities"
The maximum estimated amount, as of each of the date hereof, the
Initial Borrowing Date and the Second Borrowing Date, in each case
after giving effect to the Transaction and the incurrence of all
financings contemplated therewith, of liability reasonably likely to
result from pending litigation, asserted claims and assessments,
guaranties, uninsured risks and other contingent liabilities of each
of the Company and its Subsidiaries taken as a whole and of the
Canadian Borrower as of the date hereof, the Initial Borrowing Date
and the Second Borrowing Date after giving effect to the consummation
of the Transaction (including all fees and expenses related thereto
but exclusive of such Contingent Liabilities to the extent reflected
in Stated Liabilities).
(f) "Will be able to pay its Stated Liabilities, including Contingent
Liabilities, as they mature."
For the period from the date hereof through the Final Maturity Date,
each of the Company and its Subsidiaries taken as a whole and of the
Canadian Borrower will have sufficient assets and cash flow to pay its
respective Stated Liabilities and Contingent Liabilities as those
liabilities mature or otherwise become payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the Final Maturity Date,
each of the Company and its Subsidiaries taken as a whole and of the
Canadian Borrower, after the consummation of the Transaction and all
Indebtedness (including the Loans) being incurred or assumed and Liens
created by the Borrowers and the Subsidiary Guarantors in connection
therewith, are a going concern and have sufficient capital to ensure
that they will continue to be a going concern for such period and to
remain a going concern for such period and to remain a going concern.
3
3. For purposes of this Certificate, I, or other officers of the
Borrowers under my direction and supervision, have performed the following
procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements of the Company and its
Subsidiaries and CPLP referred to in Section 8.05(a) of the Credit
Agreement.
(b) I have reviewed the unaudited pro forma financial statements of each
--- -----
the Company and its Subsidiaries and the Canadian Borrower and its
Subsidiaries referred to in Section 8.05(a) of the Credit Agreement.
(c) I have made inquiries of certain other officials of the Company and
its Subsidiaries (including the Canadian Borrower) who have
responsibility for financial and accounting matters regarding (i) the
existence and amount of Contingent Liabilities associated with the
business of the Company and its Subsidiaries (including the Canadian
Borrower) and (ii) whether the unaudited pro forma consolidated
---------
financial statements referred to in paragraph (b) above are in
conformity with GAAP.
(d) I have knowledge of and have reviewed to my satisfaction the Credit
Documents and the other Documents, and the respective Schedules and
Exhibits thereto.
(e) With respect to Contingent Liabilities, I:
1. inquired of certain officials of the Company and its Subsidiaries
(including the Canadian Borrower) who have responsibility for
legal, financial and accounting matters as to the existence and
estimated liability with respect to all Contingent Liabilities
known to them;
2. confirmed with senior officers of the Company and its
Subsidiaries (including the Canadian Borrower) that (i) all
appropriate items were included in Stated Liabilities or
Contingent Liabilities and that (ii) the amounts relating thereto
were the maximum estimated amount of liability reasonably likely
to result therefrom as of the date hereof; and
3. I hereby certify that all material Contingent Liabilities that
may arise from any pending litigation, asserted claims and
assessments, guarantees, uninsured risks and other Contingent
Liabilities of the Company and its Subsidiaries (including the
Canadian Borrower) (exclusive of such Contingent Liabilities to
the extent reflected in Stated Liabilities) have been considered
in making the certification set forth in paragraph 4 below, and
with respect to each such Contingent Liability the estimable
maximum estimated amount of liability with respect thereto was
used in making such certification.
4
(f) I have had the Projections, which have been previously delivered to
the Banks, prepared under my direction and have re-examined the
Projections on the date hereof and considered the effect thereon of
any changes since the date of the preparation thereof on the results
projected therein. After such review, I hereby certify that the
Projections are reasonable and attainable (it being understood that
the Company makes no representation or warranty that the results
projected on the Projections will actually be attained). Furthermore,
the Projections support the conclusions contained in the last
paragraph of this Certificate.
(g) I have made inquiries of certain officers of the Company and its
Subsidiaries (including the Canadian Borrower) who have responsibility
for financial reporting and accounting matters regarding whether they
were aware of any events or conditions that, as of the date hereof,
would cause either the Company and its Subsidiaries taken as a whole
or the Canadian Borrower, after giving effect to the consummation of
the Transaction and the related financing transactions (including the
incurrence of the New Financing), to (i) have assets with a Fair Value
or Present Fair Salable Value that are less than the sum of Stated
Liabilities and Contingent Liabilities; (ii) have Unreasonably Small
Capital; or (iii) not be able to pay its Stated Liabilities and
Contingent Liabilities as they mature or otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify that after
giving effect to the consummation of the Transaction and the related financing
transactions (including the incurrence or maintenance of the New Financing), it
is my informed opinion that as of the date hereof (i) the Fair Value and Present
Fair Salable Value of the assets of each of the Company and its Subsidiaries
taken as a whole and of the Canadian Borrower exceed their respective Stated
Liabilities and Contingent Liabilities; (ii) each of the Company and its
Subsidiaries taken as a whole and of the Canadian Borrower do not have
Unreasonably Small Capital; and (iii) each of the Company and its Subsidiaries
taken as a whole and of the Canadian Borrower will be able to pay their
respective Stated Liabilities and Contingent Liabilities as they mature or
otherwise become payable. You understand and agree that this Certificate is
executed and delivered by me in my capacity as an officer of the Company and not
in my individual capacity.
IN WITNESS WHEREOF, I have hereto set my hand this ____ day of August,
1996.
CHARTWELL LEISURE INC.
By:_____________________________
Name:
Title:
Exhibit I
EXECUTION COPY
--------------
HFS SUBORDINATION AGREEMENT
---------------------------
HFS SUBORDINATION AGREEMENT (as amended, modified or supplemented from
time to time, this "Agreement"), dated as of August 28, 1996, between HFS
INCORPORATED, a Delaware corporation ("HFS"), and THE CHASE MANHATTAN BANK, as
Administrative Agent for the Banks, each as defined below. Except as otherwise
defined herein, capitalized terms used herein and defined in the Credit
Agreement referred to below are used herein as so defined.
W I T N E S S E T H:
-------------------
WHEREAS, Chartwell Leisure Inc. (the "Company"), Chartwell Canada
Corp. (the "Canadian Borrower" and, together with the Company, the "Borrowers"),
the lenders (the "Banks") from time to time party thereto, The Bank of Nova
Scotia, as Syndication Agent (the "Syndication Agent"), and The Chase Manhattan
Bank, as Administrative Agent (together with any successor administrative agent,
the "Administrative Agent"), have entered into the Credit Agreement, dated as of
August 28, 1996, providing for the making of loans and the issuance of, and
participation in, letters of credit as contemplated therein (as used herein, the
term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced,
restated, supplemented or refinanced from time to time, and including any
agreement extending the maturity of, or refinancing or restructuring (including,
but not limited to, the inclusion of additional borrowers or guarantors
thereunder or any increase in the amount borrowed) all or any portion of, the
indebtedness under such agreement or any successor agreements, whether or not
with the same agent, trustee, representative, lenders or holders) (the Banks,
the Administrative Agent, the Syndication Agent and the Collateral Agent are
herein called the "Bank Creditors");
WHEREAS, each Borrower may at any time and from time to time enter
into, or guarantee obligations of its Subsidiaries under, one or more interest
rate protection agreements (including, without limitation, interest rate xxxxxx,
swaps, caps, floors, collars, and similar agreements, collectively, the
"Interest Rate Protection Agreements") with one or more Banks or any Affiliate
thereof (any such Bank or Banks or any Affiliate of any such Bank or Banks (even
if any such Banks subsequently cease to be a Bank under the Credit Agreement for
any reason) so long as any such Bank or Affiliate thereof participates in the
extension of such Interest Rate Protection Agreement and their subsequent
assigns, if any,
2
collectively, the "Other Creditors", and together with the Bank Creditors, the
"Secured Creditors");
WHEREAS, pursuant to the HFS Guaranty, HFS has guaranteed to the Bank
Creditors the payment when due of the Guaranteed Obligations (as defined
therein) to the extent and in the manner described therein;
WHEREAS, pursuant to the Financing Agreement, the Company has agreed
to pay to HFS the Guaranty Fee;
WHEREAS, HFS has entered into the Corporate Services Agreement with
the Company pursuant to which HFS shall receive a fee from the Company for
corporate services performed by HFS on behalf of the Company;
WHEREAS, HFS has entered into various HFS Franchise Agreements with
the Company;
WHEREAS, the Credit Agreement provides that the Company is permitted,
subject to the provisions of Sections 10.03 and 10.06 of the Credit Agreement,
to pay certain amounts payable to HFS under the HFS Agreements (including
amounts payable pursuant to the Corporate Services Agreement, the Financing
Agreement and the HFS Franchise Agreements) so long as this Agreement has been
executed and delivered by the parties hereto.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES. (a) The Company hereby represents
and warrants that (i) each HFS Agreement is in full force and effect and has not
been amended or modified except pursuant to such amendments and modifications as
have been furnished to the Banks prior to the Initial Borrowing Date or as may
be permitted under the Credit Agreement, (ii) there is no default by the Company
under any HFS Agreement, (iii) the Company has not assigned, transferred,
pledged, or hypothecated the Company's interest in any HFS Agreement and (iv)
the Company knows of no default by HFS under any HFS Agreement.
(b) HFS hereby represents and warrants that (i) each HFS Agreement is
in full force and effect and has not been amended or modified except pursuant to
such amendments and modifications as have been furnished to the Banks prior to
the Initial Borrowing Date or as may be permitted under the Credit Agreement,
(ii) there is no default by HFS under any HFS Agreement, (iii) HFS has not
assigned, transferred, pledged or hypothecated HFS' interest in any HFS
Agreement, (iv) HFS knows of no default by the Company under any HFS Agreement
and (v) there are no sums currently due or owing to HFS under any HFS Agreement.
3
2. SUBORDINATION.
1.021 Subordination of Liabilities. HFS, for itself, its successors
----------------------------
and assigns, covenants and agrees that the payment of the Subordinated
Obligations (as defined in 2.08 hereof) is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, to the prior payment in full in
cash of all Senior Indebtedness (as defined in Section 2.07 hereof). The
provisions of this Section 2 shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are hereby made obligees hereunder the
same as if their names were written herein as such, and they and/or each of them
may proceed to enforce such provisions.
1.022 The Company Not to Make Payments with Respect to Subordinated
-------------------------------------------------------------
Obligations in Certain Circumstances. (a) Until all Senior Indebtedness shall
------------------------------------
have been paid in full in cash and all commitments in respect of such Senior
Indebtedness have been terminated, no payment or distribution of any kind or
character (whether in cash, property, securities or otherwise) shall be made in
respect of any Subordinated Obligations other than any payments permitted under
the Credit Agreement (including, without limitation, Sections 10.03 and 10.06
thereof).
(b) In the event that notwithstanding the provisions of the preceding
subsection (a) of this Section 2.02, the Company or any of its Subsidiaries or
Joint Ventures shall make any payment on account of the Subordinated Obligations
which is not permitted by said subsection (a), then promptly after HFS has
actual knowledge of its receipt of such excess payment (or promptly after it
receives notice from any holder of Senior Indebtedness thereof), HFS shall
reimburse the Company in cash for the amount by which the payments made to HFS
and its Subsidiaries exceed the respective amounts permitted to be paid in
accordance with the requirements of this Agreement and Sections 10.03 and 10.06
of the Credit Agreement.
1.023 Subordination to Prior Payment of all Senior Indebtedness on
------------------------------------------------------------
Dissolution, Liquidation or Reorganization of Company. Upon any distribution of
-----------------------------------------------------
assets of the Company upon dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior Indebtedness
(including, without limitation, post-petition interest at the rate
provided in the documentation with respect to the Senior Indebtedness,
whether or not such post-petition interest is an allowed claim against
the debtor in any bankruptcy or similar proceeding) before HFS is
entitled to receive any payment of any kind or character with respect
to any Subordinated Obligations, other than any payments permitted
under the Credit Agreement (including, without limitation, Sections
10.03 and 10.06 thereof);
4
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property, securities or otherwise
to which HFS would be entitled except for the provisions of this
Section 2.03, shall be paid by the liquidating trustee or agent or
other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or other trustee or
agent, directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under
any indenture under which any instruments evidencing any such Senior
Indebtedness may have been issued, to the extent necessary to make
payment in full in cash of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions
of this Section 2.03, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property,
securities or otherwise, shall be received by HFS on account of
Subordinated Obligations before all Senior Indebtedness is paid in
full in cash, which payment or distribution is not permitted by the
preceding subsections (a) and (b) of this Section 2.03, such payment
or distribution shall be received and held in trust for and shall be
paid over to the holders of the Senior Indebtedness remaining unpaid
or unprovided for or their representative or representatives, or to
the trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness may have been
issued, for application to the payment of such Senior Indebtedness
until all such Senior Indebtedness shall have been paid in full in
cash, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness.
1.024 Effect of Subordination on Obligations Pursuant to HFS
------------------------------------------------------
Agreements. HFS hereby agrees for the benefit of the Company and the Secured
----------
Creditors that, to the extent and for so long as any payment of Subordinated
Obligations is not permitted to be made pursuant to the provisions of this
Section 2, such payment shall not be payable by the Company or any of its
Subsidiaries or Joint Ventures until it is permitted to be paid in accordance
with the terms of this Section 2. To the extent that any such Subordinated
Obligations are not payable by the Company or any of its Subsidiaries or Joint
Ventures pursuant to this Section 2, HFS shall forbear from exercising any right
to terminate, or withhold performance of any of its obligations under, the HFS
Agreements as a result thereof so long as the Credit Agreement or this Agreement
shall continue to prohibit the Company or any of its Subsidiaries or Joint
Ventures from making such payments.
1.025 Subrogation. After all Senior Indebtedness has been paid in
-----------
full in cash and all commitments in respect of such Senior Indebtedness have
been terminated, HFS shall have and be entitled to all rights of subrogation
otherwise provided by law in respect of any payment it may make or be obligated
to make under this Agreement with respect to the claims
5
of the Secured Creditors against the Company or any other guarantor of the
Senior Indebtedness.
1.026 Subordination Rights Not Impaired by Acts or Omissions of the
-------------------------------------------------------------
Company or Holders of Senior Indebtedness. No right of any present or future
-----------------------------------------
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or any of its Subsidiaries or Joint Ventures or
by any act or failure to act by any such holder, or by any
noncompliance by the Company or any of its Subsidiaries or Joint Ventures with
the terms and provisions of any HFS Agreement, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The
holders of the Senior Indebtedness may, without in any way affecting the
obligations of HFS with respect hereto, at any time or from time to time and in
their absolute discretion, change the manner, place or terms of payment of,
change or extend the time of payment of, or renew or alter, any Senior
Indebtedness or amend, modify or supplement any agreement or instrument
governing or evidencing such Senior Indebtedness or any other document referred
to therein, or exercise or refrain from exercising any other of their rights
under the Senior Indebtedness including, without limitation, the waiver of
default thereunder and the release of any collateral securing such Senior
Indebtedness, all without notice to or assent from HFS; provided, that (i) the
--------
Banks will not, following a Change of Control (as defined in the Credit
Agreement), agree to extend the Final Maturity Date under the Credit Agreement
without the prior written consent of HFS unless the extension of the Final
Maturity Date occurs because of, or pursuant to, a bankruptcy, work-out or
similar restructuring of Indebtedness of the Company under the Credit Agreement
(excluding any such bankruptcy, workout or similar restructuring of Indebtedness
where the problems necessitating or giving rise to same did not exist before the
respective Change of Control or if the bankruptcy, workout or similar
restructuring occurs after the Change of Control and as a result of increased
leverage incurred to finance the respective Change of Control); (ii) if,
following a Change of Control (as defined in the Credit Agreement), the Credit
Agreement is amended, without the prior written consent of HFS, to increase the
principal amount of loans extended thereunder (other than for accruals of
interest), fees payable with respect to any HFS Agreement shall not be
subordinated to an amount equal to the increase in such principal amount; (iii)
the Banks will not, following a Change of Control and prior to the occurrence of
the Bank Termination Date (and so long as the Maximum Guaranteed Amount exceeds
$0), release all or substantially all of the Collateral (as defined in the
Pledge Agreement) without the prior written consent of HFS, except as expressly
provided in the Credit Documents; and (iv) the Banks will not amend, modify or
supplement either of Section 10.03 or 10.06 of the Credit Agreement (or add any
new provision which directly restricts the ability of the Company to pay fees to
HFS in a manner which is more restrictive than that provided in Section 10.03
and 10.06 as in effect on the Effective Date) without the prior written consent
of HFS if the respective amendment, modification, supplement or additional
provision would directly restrict the ability of the Company to pay fees to HFS
in a manner which is more restrictive than as provided in Section 10.03 and
10.06 of the Credit Agreement as in effect on the Effective Date (it being
understood and agreed, however, that the Banks may amend, modify or supplement
the Credit Agreement, without the consent of HFS, to provide more restrictive
financial or other covenants or events of default (so long as
6
the same do not directly restrict the payment of fees to HFS) and which may make
it more likely that a Default or an Event of Default will exist, which would
have the effect of preventing the payment of fees to HFS pursuant to Sections
10.03 and 10.06 of the Credit Agreement as in effect on the Effective Date).
1.027 Senior Indebtedness. The term "Senior Indebtedness" shall mean
-------------------
all Obligations, in any Currency (i) of the Company under the Credit Agreement
and the other Credit Documents and (ii) of the Company in respect of any
Interest Rate Protection Agreement. As used herein, the term "Obligation" shall
mean any principal, interest, premium, penalties, fees, expenses, guarantees by
the Company of the Canadian Borrower's obligations under the Credit Agreement
and the Revolving Notes, indemnities and other liabilities and obligations
payable under the documentation governing any Senior Indebtedness (including
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding, at the rate provided for in the documents
governing such Senior Indebtedness or obligations of the Canadian Borrower)
whether or not such interest is an allowed claim against the debtor in any such
proceeding). Senior Indebtedness under clause (i) shall not be deemed to be paid
in full unless all Obligations under clause (i) are paid in full in cash in the
applicable currency in accordance with this Agreement.
1.028 Subordinated Obligations. The term "Subordinated Obligations"
------------------------
shall mean (i) all fees, interest, indemnities, other amounts, claims, demands,
liabilities, causes of action and other obligations owing or arising under, or
with respect to, the HFS Agreements or otherwise arising or owing by the Company
or any of its Subsidiaries or Joint Ventures to HFS or any of its Subsidiaries,
including without limitation, any Termination Fee and the Guaranty Fee and (ii)
all indebtedness owed to HFS or any of its Subsidiaries by the Borrower or any
of its Subsidiaries or Joint Ventures, including, without limitation, pursuant
to any HFS Subordinated Note; provided that the amounts specifically permitted
to be paid pursuant to clauses (iii), (v), (x)(a) and (xi) of Section 10.06 of
the Credit Agreement as originally in effect shall not constitute Subordinated
Obligations.
3. MODIFICATIONS TO HFS AGREEMENTS.
The parties hereto agree that, to the extent that any fees are owing
to HFS or any of its Subsidiaries pursuant to any HFS Agreement or otherwise as
a result of the activities, operations or revenues of any non-Wholly-Owned
Subsidiary, Joint Venture or Unrestricted Subsidiary of the Borrower, then
neither the Company nor any of its Wholly-Owned Subsidiaries shall have any
liability to HFS or any of its Subsidiaries in respect of the amounts so owed,
and HFS or its respective Subsidiary shall have a claim for the respective
amounts owed to it only against the respective non-Wholly-Owned Subsidiary,
Joint Venture or Unrestricted Subsidiary, as the case may be, provided that,
notwithstanding the foregoing, the Company may be liable for its Allocable Share
of any such fees of only a non-Wholly-Owned Subsidiary or Joint Venture (but not
of an Unrestricted Subsidiary) (as determined for the respective non-Wholly-
Owned Subsidiary or Joint Venture).
7
4. AGREEMENTS OF HFS. HFS covenants and agrees that on and after the
date hereof and until all Senior Indebtedness shall have been paid in full in
cash and all commitments in respect of such Senior Indebtedness have been
terminated:
1.041 Assignment by HFS. HFS will not assign, pledge, encumber or
-----------------
hypothecate any right, title or interest of HFS in, to or under any HFS
Agreement without the prior written consent of the Required Banks, except that
assignments by operation of law and to any Subsidiary of HFS shall be permitted
so long as HFS is not released from any liability thereunder.
1.042 Restricted Payments. In addition to the agreements contained in
-------------------
preceding Section 2, HFS hereby agrees that it shall not, and shall not permit
any of its Subsidiaries to, accept any payment or distribution of any kind or
character (whether in cash, property, securities or otherwise) which constitutes
a Restricted Payment other than any such payments permitted to be made under the
Credit Agreement (including, without limitation, Sections 10.03 and 10.06
thereof). In the event that notwithstanding the provisions of this Section 4.02,
HFS or any of its Subsidiaries shall receive any Restricted Payment which is not
permitted to be paid pursuant to the immediately preceding sentence or pursuant
to this Agreement, then promptly after HFS has actual knowledge of the receipt
of such excess payment (or promptly after it receives notice from any holder of
Senior Indebtedness thereof), HFS shall reimburse the Company in cash for the
amount by which the payments made to HFS and its Subsidiaries exceed the
respective amounts permitted to be paid in accordance with the requirements of
this Agreement and Sections 10.03 and 10.06 of the Credit Agreement.
1.043 Termination of any HFS Agreement. Notwithstanding anything to
--------------------------------
the contrary contained in any HFS Agreement, HFS will not, and will not permit
any of its Subsidiaries to, prior to the payment in full in cash of all Senior
Indebtedness and the termination of all commitments in respect of such Senior
Indebtedness, exercise its rights and remedies under any HFS Agreement without
the consent of the Required Banks with respect to any default under such HFS
Agreement including without limitation, its right to terminate any HFS Agreement
for any reason whatsoever, except that HFS and its Subsidiaries shall have the
right to enforce payment by the Company and its Subsidiaries and Joint Ventures
of all amounts due and permitted to be paid in accordance with this Agreement
and the Credit Agreement.
1.044 Amendments, Modifications and New Agreements. HFS shall not,
--------------------------------------------
and hall not permit any of its Subsidiaries to, amend or modify, or permit the
amendment or modification of, any agreement between HFS or any of its
Subsidiaries with the Company or any of its Subsidiaries or Joint Ventures, or
enter into any new agreement with any such Person, in each case if the
respective amendment, modification or entry into a new agreement would be in
violation of Section 10.12 of the Credit Agreement.
5. PURCHASE OF LOANS. At any time after HFS has made any payments
pursuant to the HFS Guaranty (or after the Administrative Agent or the Banks
have made any demand for payment pursuant to the HFS Guaranty) or made loans to,
or investments in, the
8
Company pursuant to Section 10.04(vii) or (viii) of the Credit Agreement, or if
HFS is otherwise prohibited from receiving the full amount of fees which would
otherwise be paid to it from the Company or any of its Subsidiaries or Joint
Ventures by virtue of the restrictions contained in Sections 10.03 and 10.06 of
the Credit Agreement or at any time following a Change of Control, HFS at its
option may purchase all the Loans and Revolving Loan Commitments and Revolving
C$ Loan Commitments of all Banks pursuant to the Credit Agreement by paying the
Banks in cash, in the applicable Currency, an amount equal to all outstanding
principal, interest and other amounts pursuant to the Credit Agreement (and by
unconditionally guarantying and cash collateralizing in full all Letters of
Credit and all Facing Fees and Letter of Credit Fees payable with respect
thereto through the stated termination thereof) and the other Credit Documents;
provided that concurrently with any purchase as provided above, HFS shall have
made arrangements satisfactory to each Other Creditor (as defined in the Pledge
Agreement) to terminate each Interest Rate Protection Agreement or Other Hedging
Agreement to which such Other Creditor is a party and pay all amounts owing as a
result thereof or otherwise shall have made arrangements satisfactory to each
such Other Creditor to indemnify it against any failure of the Company and its
Subsidiaries to make all payments owing with respect to each such Interest Rate
Protection Agreement or Other Hedging Agreement.
6. AMENDMENT. No modification, amendment, waiver or release of any
provision of this Agreement or of any right, obligation, claim or cause of
action arising hereunder shall be valid or binding for any purpose whatsoever
unless in writing and duly executed by HFS and the Administrative Agent (with
the consent of the Required Banks).
7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PRINCIPLES.
8. TERMINATION. This Agreement shall terminate on the date on which
all commitments under the Credit Agreement have terminated and all amounts owing
thereunder have been repaid in full.
9. THIRD PARTY BENEFICIARIES. This Agreement is entered into for the
benefit of the holders from time to time of the Senior Indebtedness, and may not
be amended or modified in any respect, or terminated, without the consent of the
Administrative Agent (with the consent of the Required Banks). The provisions
of this Agreement are continuing provisions and all Senior Indebtedness to which
they apply shall conclusively be presumed to have been created in reliance
thereon. Except to the extent provided in Section 2.04 hereof, this Agreement
is not entered into for the benefit of the Company, and neither the Company nor
any creditor of the Company (other than the holders from time to time of the
Senior Indebtedness) shall be a third party beneficiary of this Agreement.
Except as otherwise expressly set forth herein (including by reference to the
Credit Agreement), no provision of this Agreement shall be deemed to modify or
release the Company from any of the Subordinated Obligations.
9
10. NOTICES ETC. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which notice, request, demand or other communication is required or
permitted to be given or made under this Agreement, addressed as follows:
(a) if to HFS, at:
HFS Incorporated
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) if to the Company, at:
Chartwell Leisure Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) if to the Administrative Agent or the Collateral Agent, at:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
* * *
10
IN WITNESS WHEREOF, HFS and the Administrative Agent have caused this
Agreement to be duly executed and delivered as of the date first written above.
HFS INCORPORATED
By:__________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent for the Banks
By:__________________________
Name:
Title:
Acknowledged and agreed by:
CHARTWELL LEISURE INC.
By:__________________________
Name:
Title:
EXHIBIT J
---------
HFS SUBORDINATED NOTE
---------------------
$__________________ ____________________, _________
FOR VALUE RECEIVED, CHARTWELL LEISURE INC., a Delaware corporation
(the "Company"), hereby promises to pay to HFS INCORPORATED (the "Payee"),
on_______________________/1/ in lawful money of the United States of America in
immediately available funds, at ______________________________________________,
the principal sum of _________________________DOLLARS ($ ).
The Company further promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at a
rate per annum which shall, during each Interest Period applicable hereto, be
equal to the sum of the Applicable Margin for $ Eurodollar Loans as in effect
from time to time plus the Eurodollar Rate for such Interest Period. Successive
three month Interest Periods (beginning on the date hereof) shall be applicable
for purposes of making all interest determinations pursuant to this HFS
Subordinated Note, with accrued interest to be paid hereunder (subject to the
subordination provisions referenced below) on the last day of each such Interest
Period. Interest Periods and the Applicable Margin applicable to this HFS
Subordinated Note shall be determined on the same basis as is provided in the
Credit Agreement, and the Eurodollar Rate for each Interest Period shall also be
determined as provided in the Credit Agreement. As used herein, the term
"Credit Agreement" shall mean the Credit Agreement, dated as of August 28, 1996,
among the Company, Chartwell Canada Corp., various lenders from time to time
party thereto, The Bank of Nova Scotia, as Syndication Agent, and The Chase
Manhattan Bank, as Administrative Agent, as the same may be amended, modified,
extended, renewed, replaced, restated, supplemented or refinanced from time to
time, and including any agreement extending maturity of, refinancing or
restructuring all or any portion of, the indebtedness under such agreement or
any successor agreements.
The parties hereto hereby agree that all payments hereunder shall be
subordinated as provided in the HFS Subordination Agreement referred to in the
Credit Agreement. Furthermore, to the extent a payment is not permitted to be
paid by virtue of said subordination provisions, the Payee shall not exercise
any rights or remedies in respect of any
_______________
/1/ Insert date which is on or later than the first anniversary of the Final
Maturity Date as defined under the Credit Agreement, as the same may be
modified, amended or supplemented from time to time.
Page 2
amount owing under this HFS Subordinated Note which is not permitted to be paid
at such time as a result of such subordination provisions.
THE HOLDER OF THIS HFS SUBORDINATED NOTE, BY ACCEPTANCE HEREOF, AGREES
WITH THE COMPANY THAT THIS HFS SUBORDINATED NOTE, AND THE COMPANY'S OBLIGATIONS
HEREUNDER, SHALL BE SUBORDINATE AND JUNIOR TO ALL INDEBTEDNESS OF THE COMPANY
CONSTITUTING SENIOR INDEBTEDNESS (AS DEFINED IN THE HFS SUBORDINATION AGREEMENT)
ON THE TERMS AND CONDITIONS SET FORTH IN THE HFS SUBORDINATION AGREEMENT, WHICH
HFS SUBORDINATION AGREEMENT IS HEREIN INCORPORATED BY REFERENCE AND MADE A PART
HEREOF AS IF SET FORTH HEREIN IN ITS ENTIRETY.
This HFS Subordinated Note may not be pledged, transferred or assigned
by Payee without the prior written consent of the Company.
This HFS Subordinated Note shall be construed in accordance with and
be governed by the law of the State of New York.
CHARTWELL LEISURE INC.
By:_____________________________
Name:
Title:
Agreed and Accepted:
HFS INCORPORATED
By:___________________________
Name:
Title:
EXHIBIT K
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
Date _____________, _______
Reference is made to the Credit Agreement described in Item 2 of Annex
I hereto (as such Credit Agreement may hereafter be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless defined
in Annex I hereto, terms defined in the Credit Agreement are used herein as
therein defined. _____________ (the "Assignor") and ___________ (the
"Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I hereto (the "Assigned Share") of all of
the outstanding rights and obligations of the Assignor under the Credit
Agreement relating to the Total Revolving Loan Commitment and the Total
Revolving C$ Loan Commitment, including all rights and obligations with respect
to the Assigned Share of the Total Revolving Loan Commitment, the Total
Revolving C$ Loan Commitment, the Revolving Loans and the Letters of Credit.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of HFS or the Company or
any of its Subsidiaries or the performance or observance by HFS or the Company
and its Subsidiaries of any of their obligations under the Credit Agreement or
the other Credit Documents to which they are a party or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to
EXHIBIT K
Page 2
make its own credit analysis and decision to enter into this Assignment and
Assumption Agreement; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Syndication Agent, the Assignor or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Transferee under the Credit Agreement; (iv) appoints and authorizes the
Administrative Agent, the Syndication Agent, and the Collateral Agent to take
such action as administrative agent, documentation agent and collateral agent,
as the case may be, on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to the Administrative
Agent, the Documentation Agent, and the Collateral Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; [and] (v) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Agreement are required to be performed by it as a
Bank[; and (vi) to the extent legally entitled to do so, attaches the forms
described in Section 14.04(b) of the Credit Agreement.]/1/
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the date
of execution hereof by the Assignor and the Assignee and the receipt of any
consent of Chase and any other Issuing Bank to the extent required by Section
14.04(b) of the Credit Agreement, the receipt by the Administrative Agent of the
assignment fee referred to in such Section 14.04(b) and the recordation of the
assignment effected hereby on the Register by the Administrative Agent as
provided in Section 14.16 of the Credit Agreement, or such later date, if any,
which may be specified in Item 5 of Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent and the recordation of the assignment effected hereby on
the Register by the Administrative Agent as provided in Section 14.16 of the
Credit Agreement, as of the Settlement Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other Credit
Documents.
6. It is agreed that the Assignee shall be entitled to (w) all
interest on the Assigned Share of the Revolving Loans at the rates specified in
Item 6 of Annex I hereto; (x) all Commitment Commission on the Assigned Share
of the Total Revolving Loan Commitment at the rate specified in Item 7 of Annex
I hereto; and (y) all Letter of Credit Fees on the Assignee's participation in
all Letters of Credit at the rate specified in Item 8 of Annex I
-------------------
/1/ If the Assignee is organized under the laws of a jurisdiction outside the
United States.
EXHIBIT K
Page 3
hereto, which, in each case, accrue on and after the Settlement Date, such
interest, Commitment Commission and Letter of Credit Fees, to be paid by the
Administrative Agent directly to the Assignee. It is further agreed that all
payments of principal made on the Assigned Share of the Revolving Loans which
occur on and after the Settlement Date will be paid directly by the
Administrative Agent to the Assignee. Upon the Settlement Date, the Assignee
shall pay to the Assignor an amount specified by the Assignor in writing which
represents the Assigned Share of the principal amount of the Revolving Loans
made by the Assignor pursuant to the Credit Agreement which are outstanding on
the Settlement Date, net of any closing costs, and which are being assigned
hereunder. The Assignor and the Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Settlement Date
directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
* * *
EXHIBIT K
Page 4
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written.
Accepted this _____ day [NAME OF ASSIGNOR],
of _______________, _______ as Assignor
By:_________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By:_________________________
Title:
Acknowledged:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_________________________
Title:
[Acknowledged and Agreed:
THE CHASE MANHATTAN BANK,
as an Issuing Bank]
By:_________________________
Title:
[NAME OF ANY OTHER ISSUING BANK]
as an Issuing Bank
By:_________________________/2/
Title:]
-------------------
/2/ Consent of Issuing Bank is required for assignments pursuant to Section
14.04(b)(y) of the Credit Agreement.
ANNEX I
-------
ANNEX FOR BANK ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Borrowers:
Chartwell Leisure Inc. and Chartwell Canada Corp.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of August 28, 1996, among Chartwell Leisure
Inc., Chartwell Canada Corp. the Banks from time to time party
thereto, The Bank of Nova Scotia, as Syndication Agent, and The Chase
Manhattan Bank, as Administrative Agent.
3. Date of Assignment Agreement:
_________________ _____, ______.
4. Amount (as of date of item #3 above):
Revolving Loan Revolving C$
Commitment Loan Commitment
-------------------- --------------------
a. Aggregate Amount
for all Banks $__________________ $______________
b. Assigned Share __________________% _____________%
c. Amount of
Assigned Share $___________________ $______________
5. Settlement Date:
_________________ _____, ______.
ANNEX I
Page 2
6. Rate of Interest to the Assignee:
As set forth in Section 1.08 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the Assignee)./3/
7. Commitment Commission:
As set forth in Section 3.01(a) of the Credit Agreement (unless
otherwise agreed to by the Assignor and the Assignee)./4/
8. Letter of Credit Fees to the Assignee:
As set forth in Section 3.01(c) of the Credit Agreement (unless
otherwise agreed to by the Assignor and the Assignee)./5/
9. Notice:
ASSIGNOR:
___________________________
___________________________
___________________________
___________________________
Attention:
Telephone No.:
Facsimile No.:
Reference:
-------------------
/3/ The Borrowers and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in Section 1.08 of
the Credit Agreement, with the Assignor and Assignee effecting the agreed
upon sharing of the interest through payments by the Assignee to the
Assignor.
/4/ The Borrowers and the Administrative Agent shall direct the entire amount
of the Commitment Commission to the Assignee at the rate set forth in
Section 3.01(a) of the Credit Agreement, with the Assignor and the Assignee
effecting the agreed upon sharing of Commitment Commission through payment
by the Assignee to the Assignor.
/5/ The Borrowers and the Administrative Agent shall direct the entire amount
of the Letter of Credit Fees to the Assignee at the rate set forth in
Section 3.01(b) of the Credit Agreement, with the Assignor and the Assignee
effecting the agreed upon sharing of Letter of Credit Fees through payment
by the Assignee to the Assignor.
ANNEX I
Page 3
ASSIGNEE:
___________________________
___________________________
___________________________
___________________________
Attention:
Telephone No.:
Facsimile No.:
Reference:
Payment Instructions:
ASSIGNOR:
___________________________
___________________________
___________________________
___________________________
ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
___________________________
___________________________
___________________________
___________________________
ABA No.:
Account No.:
Reference:
Attention:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By:_____________________ By:_____________________
Title Title
EXHIBIT L-1
Site No.:
Property:
LICENSE AGREEMENT
FORTE HOTELS, INC.
0000 XXXXXXXXXX XXXXX, XX XXXXX, XXXXXXXXXX 00000
THIS AGREEMENT entered into at El Cajon, California, this ________ day of
January 1996, by and between FORTE HOTELS, INC., a California corporation,
hereinafter referred to as "LICENSOR," and __________________________, a
Delaware corporation, hereinafter referred to as "LICENSEE," who is the owner,
lessee, and/or operator of the specific premises described as follows:
located at
hereinafter referred to as the "property" or the "motor hotel".
WITNESSETH:
WHEREAS, LICENSOR has developed and implemented a plan for providing, and
has provided, a network of motor hotels and related services of high quality and
of distinguishing characteristics (hereinafter referred to as the "System"),
including (but not limited to) the following:
(1) The right to use the registered service marks and trademarks,
"Travelodge(R)" and "Sleepy Bear(R)," which have been registered or applied for
in the United States Patent Office and in the appropriate trademark offices in
other countries, use of both of which is solely and exclusively granted by
LICENSOR;
(2) The words, service marks or trademarks "Travelodge(R)," "Travelodge(R)
Hotel," "Travelodge(R) Motel," "Sleepy Bear(R)," and other combinations of said
words, service marks or trademarks, either alone or in association with the
color schemes, building designs, insignia, logograms, slogans and signs, used as
part of the System, in association with a nationwide service of motor hotels all
symbolizing standardized, high quality, distinctive motor hotel service;
(3) Style, color and other distinguishing characteristics equipment,
furnishings and appliances used in and about the motor hotel or any other
distinguishing characteristics;
(4) Methods of operation, referrals and reservation procedures and
national advertising and publicity service; and
(5) Standardized, uniform motor hotels services providing lodging, food,
beverage, and other conveniences, parking for automobiles, and motor hotel
services of a distinctive nature in accordance with fair and ethical policies
and practices and with the highest standards of efficiency, courtesy,
hospitality and cleanliness; and
WHEREAS, LICENSEE wishes to be a part of the System and to be licenses to
provide motor hotel services of the same distinctive nature and high quality as
has been established and to use the same trademarks, service marks, color
patterns and schemes, signs, designs and other distinguishing characteristics of
the System as have been established and are provided by LICENSOR. It is the
intention of the parties that the motor hotel which is the subject of the
license granted under this Agreement, together with motels and motor hotels now
or hereafter operated by LICENSOR and/or joint ventures of which LICENSOR and/or
affiliates are a party, and those operated or to be operated by other licensees,
will form parts of the System. The success of both parties to this Agreement
and of other licensees is directly affected by the business conduct of all
licensees in the System. LICENSEE, therefore, recognizes that adherence to the
terms of this Agreement, including the payment of all fees, is a matter of
mutual importance and consequence to LICENSEE, to Licensor and to all other
licensees.
THE TRAVELODGE(R) System is comprised of the LICENSOR, ITS LICENSEES, ITS
CUSTOMERS, ITS POTENTIAL CUSTOMERS AND ITS VENDORS AND SUPPLIERS. It is the
role of LICENSOR to administer the License Agreement and in so doing weigh the
needs of the entire TRAVELODGE system, and all of the licensees in it. LICENSOR
has a paramount duty to protect the Travelodge trademark for the ultimate
benefit of the TRAVELODGE franchise system. Any control TRAVELODGE LICENSOR
exerts over LICENSEE pursuant to this Agreement is limited to the amount
necessary to protect LICENSOR's trademarks and service marks.
NOW, THEREFORE, IT IS MUTUALLY COVENANTED AND AGREED AS FOLLOWS:
1. LICENSOR grants to LICENSEE, subject to the terms and conditions
hereof, a nonexclusive license to use the System and the registered trademarks
and service marks, "Travelodge(R)" and "Sleepy Bear(R)" for and in connection
with LICENSEE'S aforesaid motor hotel, the location of which is described above.
Said motor hotel shall be operated under the name Hayward (S.F. Bay), except as
otherwise required hereunder.
2. a. This Agreement and License shall be in effect for a term
commencing on the date hereof and continuing for a period (the "Term") of twenty
(20) years. NEITHER PARTY HAS RENEWAL RIGHTS OR OPTIONS.
b. Notwithstanding the foregoing, this Agreement may be terminated
during the term hereof if LICENSEE shall:
-2-
i.) violate any covenant, condition or obligation herein contained,
or any standard in the then current TRAVELODGE operations
manual, or contained in any other agreement between the parties
hereto or their affiliated companies, and such violation
continues after the expiration of thirty (30) days after
written notice of default from LICENSOR stating the facts of
such breach; or
ii.) make an assignment for the benefit of creditors or become
insolvent; or file a voluntary petition in bankruptcy, or be
adjudicated a bankrupt or insolvent, or file any petition or
answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, under any present or
future law or regulation or seek or acquiesce in the
appointment of any trustee, receiver or liquidator for any
substantial part of the properties of LICENSEE; or if, within
sixty (60) days after the commencement of any proceeding
against LICENSEE seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any present or future law or regulation, such
proceeding shall not have been dismissed; or if, within sixty
(60) days after the appointment without the consent or
acquiescence of LICENSEE of any trustee, receiver or liquidator
of any substantial part of the properties of LICENSEE of any
trustee, receiver or liquidator of any substantial part of the
properties of LICENSEE, such appointment shall not have been
vacated; or
iii.) following substantial destruction by fire or other cause, not
rebuild and open for business to the public within a period not
exceeding twelve (12) months, in accordance with the original
plans or such other plans and specifications as shall be
approved by LICENSOR in writing.
Then LICENSOR may, at its option, by written notice to LICENSEE,
immediately declare this Agreement and License and all rights and privileges
hereunder terminated, and LICENSEE shall pay to LICENSOR any and all accrued
amounts due to the effective date of such termination and any and all damages
suffered by LICENSOR as a result of such termination.
Both parties agree that if LICENSEE violates any covenant, condition
or obligation contained herein, LICENSOR shall be entitled to compensation for
the detriment incurred, but that it is extremely difficult and impractical to
ascertain the extent of the detriment. To avoid this problem, the parties agree
to liquidated damages as provided in Paragraph 30.
3. In consideration of the extremely valuable rights granted to LICENSEE
hereunder, Licensee shall make payments to Licensor as follows:
-3-
a. An initial license fee (hereinafter the "initial license fee") of
Dollars ($0.00), plus any applicable taxes, which has been fully earned and is,
therefore, nonrefundable.
b. In addition, LICENSEE shall, within five (5) days after the end
of each calendar month during the term of this Agreement, commencing with the
calendar month in which operations begin at the motor hotel, pay to LICENSOR
royalty fee equal to four percent (4%) of the Gross Room Revenue. This royalty
fee is in consideration of LICENSEE's use of LICENSOR's trademarks and service
marks, and is fully earned each day such trademarks and service marks are used
by LICENSEE, and is not subject to any counterclaims or setoffs of any nature.
c. LICENSEE agrees that a percentage of the Gross Room Revenue (as
that term is defined herein) of the motor hotel shall be paid each month to the
Licensor Marketing Fund for national advertising and promotion of motels and
motor hotels operating under Licensor's Trademarks and Service Marks within five
(5) days after the end of each calendar month. The percentage of Gross Room
Revenue to be paid hereunder, currently four percent (4.0%), shall be set by the
Board of Directors of LICENSOR, from time to time, and the percentage so set
shall be effective commencing on the first day of the month following the month
in which the Board of Directors so set the said percentage. LICENSEE may
receive bills from LICENSOR for its proportionate share of the cost of the
referral reservation and directory service, for travel agents' or airline
commissions for LICENSEE's property, and for other services provided to the
LICENSEE and LICENSEE shall timely pay the amount of such bills.
d. All past due accounts incurred pursuant to this section shall
bear an interest rate not to exceed one and one-half percent (1 1/2%) of the
unpaid balance per month, or the highest rate of interest permitted by law in
the jurisdiction where the motor hotel is located, whichever is lower, and
LICENSEE authorizes LICENSOR to deduct any sums LICENSEE is in arrears to
LICENSOR from any sums payable by TRAVELODGE LICENSOR to LICENSEE.
e. It is anticipated that the LICENSOR may enter into certain
contractual obligations on behalf of LICENSEE including, but not limited to,
agreements in connection with the sites for, erection or maintenance of one or
more billboard type advertising signs. LICENSOR may expend funds at its
discretion to best support the Travelodge system. To induce LICENSOR to enter
into such contractual arrangements, LICENSEE does hereby agree to pay all costs
and expenses, and to hold LICENSOR harmless from all costs and liability,
incurred in connection therewith. LICENSOR will only enter into such property
specific agreements with LICENSEE's approval. TRAVELODGE LICENSOR does not
guarantee any minimum number of guests from the referral reservation and
directory service.
f. The term "Gross Room Revenue" as used herein shall include all
receipts derived from the renting, use or occupancy of guest rooms and meeting
rooms in the
-4-
motor hotel, excluding sales taxes or other taxes which may be required by law
to be collected from guests.
4. a. On, or before five (5) days after the end of each calendar month,
LICENSEE shall submit to LICENSOR a statement on special forms provided to
LICENSEE by LICENSOR showing the number of rooms rented and the Gross Room
Revenue obtained with respect to the motor hotel during such month, and each
such statement shall be certified by LICENSEE to be true and accurate and shall
be accompanied by the payment set forth in Paragraphs 3.b and 3.c above.
b. LICENSEE shall keep on the premises of the motor hotel true and
accurate books, records and accounts relating to Gross Room Revenues for a
period of at least two (2) years, and LICENSOR, its agents or representatives,
shall be allowed to examine and audit and make copies of entries in said books,
records and accounts at all reasonable times. If LICENSOR, or its agents or
representatives discover a discrepancy in LICENSEE reporting to LICENSOR of
greater than five percent (5%), then the LICENSEE shall reimburse LICENSOR for
all costs incurred in performing such audit, including travel, meals and lodging
for the auditors.
c. LICENSEE shall provide LICENSOR, within sixty (60) days following
the close of each fiscal year, a Statement of Operations, including an unaudited
Balance Sheet and Profit and Loss Statement for such fiscal year, copies of
occupancy tax forms submitted to governmental agencies and at other times such
reports as LICENSOR may require on forms to be prescribed by LICENSOR, all to be
true and correct and prepared in conformity with generally accepted accounting
principles on a basis consistent with that of the prior year. LICENSEES with
motor hotels of 100 rooms or more must also provide LICENSOR with a revenue
audit prepared by an independent certified public accountant for each fiscal
year. Such audit will be provided to LICENSOR within sixty (60) days of the
close of LICENSEE'S fiscal year.
5. a. LICENSEE acknowledges LICENSOR's exclusive right and title to use
and to license others to use the registered service marks and trademarks.
LICENSEE agrees not to use or imitate the said System or service marks and
trademarks except under written license from LICENSOR;
b. The License herein granted to use "Travelodge(R)," "Sleepy
Bear(R)," and any other service marks and trademarks subsequently adopted by
LICENSOR is nonexclusive and is applicable only to the specific motor hotel
described herein;
c. Exclusive title and rights to use and to license others to use
any other service marks and trademarks subsequently adopted by LICENSOR for the
System or any part thereof or addition thereto shall be the exclusive property
of LICENSOR;
-5-
d. All highway or other signs depicting the words, style and design
of "Travelodge(R)" and also the likeness "Sleepy Bear(R)" which advertise
LICENSEE's motor hotel shall first be approved by LICENSOR in writing in all
respects, including size, location, copy, color and materials, which approval
shall not be unreasonably withheld;
e. In all uses of the registered marks "Travelodge(R)" and "Sleepy
Bear(R)" by LICENSEE, an "R" in a circle shall be affixed adjacent to such
marks: (R), and in Canada the following legend included at least once in
connection with such use: "Marks used under license".
f. LICENSEE shall not use the name "Travelodge(R)" nor "Sleepy
Bear(R)" as a part of its partnership, joint venture, corporate or other
business name; and
g. Upon any termination of this Agreement this instrument forthwith
constitutes an assignment to LICENSOR of all of LICENSEE's rights in and to said
service marks and trademarks, "Travelodge(R)" and "Sleepy Bear(R)," together
with the good will of the business then symbolized thereby insofar as LICENSEE
and said motor hotels are concerned, and LICENSEE will immediately discontinue
all use of said registered service marks and trademarks and shall immediately
obliterate the words "Travelodge(R)," "Sleepy Bear(R)" and the design of "Sleepy
Bear(R)" from LICENSEE's signs and from any and all places and materials
whatsoever.
If LICENSEE shall fail to obliterate any such words within fifteen
(15) days after written demand, then LICENSOR by its duly authorized agents may
enter upon the premises of LICENSEE to accomplish said results without being
guilty of trespass or any other tort, and may make or cause to be made such
changes at the expense of LICENSEE, which LICENSEE agrees to pay on demand.
LICENSOR and LICENSEE further agree that it would be impractical or extremely
difficult to fix the actual damage sustained by LICENSOR for LICENSEE's use of
the service marks and trademarks "Travelodge(R)" or "Sleepy Bear(R)," and
LICENSEE agrees therefore to pay to LICENSOR as liquidated damages Five Hundred
Dollars ($500) a day for each day's unauthorized use thereof. LICENSEE also
agrees that LICENSOR will suffer great and irreparable injury from any use by
LICENSEE, after the termination of this Agreement of the service marks and
trademarks "Travelodge(R)" and "Sleepy Bear(R)" and that injunctive relief will
be the only fair, adequate and complete remedy available to LICENSOR.
Accordingly, LICENSEE hereby consents to the entry of an injunction in favor of
LICENSOR, permanently enjoining further use of said service marks and trademarks
subsequent to any such termination of this Agreement.
6. LICENSEE agrees:
a. To maintain a high moral standard and atmosphere at LICENSEE's
Travelodge(R);
-6-
b. To comply with all local, State and Federal laws, ordinances,
rules and regulations pertaining thereto; to maintain its premises and
accommodations in a clean, safe and orderly manner;
c. To provide efficient, courteous and high quality Travelodge(R)
System service to the public;
d. To furnish motor hotel services and conveniences of the same
quality, type and distinguishing characteristics as are established and
maintained by LICENSOR in the System, to the end that the motor hotel operated
by LICENSEE under this Agreement shall help to create and build good will among
the public for Travelodge(R) System motels and motor hotels as a whole and so
that LICENSOR, LICENSEE, and each member of said system shall be benefitted, and
the public assured uniform, efficient, courteous, high quality service on a
standardized basis; to comply with any and all marketing manuals as are
currently used in the System, or which may hereafter be implemented for use in
the System by LICENSOR;
e. To conduct its motor hotel business and advertise the same by use
of such symbols as may be established from time to time by LICENSOR and none
other; to diligently promote and make every reasonable effort to steadily
increase said business by selling and providing accommodations and related
services at its motor hotel to all persons who inquire for them and by printed
advertisements and highway signs a reasonable distance from the location of the
motor hotel;
f. To refrain from using any items of merchandise, equipment,
stationery, supplies, furnishings or utensils bearing the service marks or
trademarks, "Travelodge(R)" or "Sleepy Bear(R)," in connection with the
operation of the motor hotel unless the same shall have been first submitted to
and approved in writing by LICENSOR, which approval shall not be unreasonably
withheld;
g. To use and distribute guidebooks and directories in accordance
with standards and requirements established by LICENSOR;
h. To repair and paint (color scheme to be approved by LICENSOR) the
exterior and interior of the motor hotel buildings and structures at reasonable
times or upon the request of LICENSOR; and at all times to maintain the interior
and exterior of the building, structures and surrounding premises in a clean,
orderly and sanitary condition satisfactory to LICENSOR. The failure to repair
and paint is to be considered a monetary default;
i. To permit inspection at all reasonable times of accommodation and
related service facilities and procedures by LICENSOR representatives to assure
full compliance with this Agreement;
-7-
j. To comply with the standards of hosting, management, food service
and preparation, and housekeeping established by the Operations Department of
LICENSOR, and to follow the procedures set forth in the operations manual
published by LICENSOR (as revised from time to time), receipt of a copy of which
is acknowledged. No variation from these standards and procedures is permitted
without the prior written consent of LICENSOR. The Travelodge(R) operations
manual shall remain the sole property of LICENSOR and shall be returned to
LICENSOR in the event of the termination of this Agreement;
k. To abide by the operational policy decisions determined by the
representative board of the system and by the majority decisions of the co-owner
and licensees of the System. However, in the event of any conflict between said
operational policy decisions and provisions of the Travelodge(R) operations
manual, the latter shall control. LICENSEE shall cooperate with LICENSOR, the
Licensor Marketing Fund and the owners and manager of other Travelodge(R) motels
and motor hotels with regard to common problems and policies;
l. To obtain the approval of LICENSOR for all furniture,
furnishings, fixtures, supplies, utensils and equipment which it proposes to use
in its motor hotel; to purchase or lease from LICENSOR, or from anyone
designated by LICENSOR, all furniture, furnishings, fixtures, supplies, utensils
and equipment which it proposes to use in its motor hotel. LICENSEE shall not
be obligated to purchase or lease any of said items from LICENSOR or its
designee if LICENSEE desires to purchase or lease the same from third persons
provided, however, said items must be at least equal in quality and strength to
those specified by LICENSOR for the System in its specifications in respect
thereof;
m. To give consideration to rental rates to be charged for motor
hotel rooms to be rented to the public that LICENSOR, on the basis of its
experience in respect to relevant factors including services offered, location
and area, may from time to time recommend to the end that the public and the
System will best be served and protected, particularly against excessive
charges;
n. To cause the person or person who will be directly responsible
for the management and operation of the motor hotel business contemplated by
this Agreement to attend the LICENSOR orientation school to become familiar with
the System. The cost for attending the orientation school shall be borne by
LICENSEE;
o. To participate in all LICENSOR network promotions and programs
including, but not limited to VNA, FIT, group coupons, industry discounts,
senior citizens, airline discounts, travel agent discounts, family plans,
children's-free policy, children's programs, Break Rate programs and Frequent
Traveler Program;
p. To comply with LICENSOR standards for guest supplies;
-8-
q. To participate in LICENSOR's international referral system for
guests, groups and meeting planners;
r. To comply with LICENSOR standards for reservation services and
equipment including, but not limited to, airline surcharges, general sales
agents fees and property terminal system;
s. To attend the annual Travelodge(R) Conference, area meetings and
special LICENSOR meetings;
t. To comply with all travel trade policies and procedures
including, but not limited to, travel agent commissions, group tour policies,
travel agent and group promotions and trade show support;
u. To participate in LICENSOR programs that recognize individuals or
companies responsible for booking guests into Travelodge(R); and
v. To comply with LICENSOR employee standards for uniform
appearance, and treatment of guests. LICENSOR shall have no authority to hire,
fire, or control LICENSEE's employees.
7. LICENSOR expressly reserves the right to reasonably revise, amend and
change from time to time the System or any part thereof. Such System, as so
changed, revised or amended, shall for all purposes be deemed to be the System
referred to in this Agreement. Any and all improvements in the System developed
by LICENSOR or by LICENSEE shall be and become the sole and absolute property of
LICENSOR and become part of the LICENSOR business knowledge, and LICENSEE shall
have no right to use such improvements or business knowledge except in
accordance with this Agreement. Information and data disclosed by LICENSEE in
respect to its motor hotel operations and business shall not be confidential.
8. During the term of this Agreement, LICENSEE will not discontinue the
operation of the motor hotel under the service xxxx and trademark
"Travelodge(R)," nor sell, transfer, assign, lease or sublet, nor offer to sell,
transfer, assign, lease or sublet any interest in the names "Travelodge(R)" or
"Sleepy Bear(R)," the motor hotel or any part thereof, or in the business
conducted in connection therewith, or in the buildings, equipment or furnishings
used in connection therewith, or any interest in LICENSEE without the prior
written consent of LICENSOR, which consent shall not be unreasonably withheld.
In approving of the proposed transferee, TRAVELODGE LICENSOR shall take into
consideration, among other factors, the financial condition of the proposed
transferee, the proposed transferee's previous business experience and the
general integrity and reputation of the proposed transferee.
a. If LICENSEE, at any time during the term hereof, shall receive a
bona fide offer acceptable to LICENSEE to purchase, lease or sublease the motor
hotel,
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LICENSEE shall promptly inform LICENSOR in writing, setting forth the full terms
of such offer, and LICENSOR may, within thirty (30) days after receipt of such
written notice, at its option, elect, by giving written notice to LICENSEE, to
purchase, lease or sublease the motor hotel on the same terms and conditions
contained in said offer. Until the end of said thirty (30) day option period,
LICENSEE shall not accept any third-party bona fide offer;
b. If, at the expiration of the thirty (30) day period referred to
in Subparagraph 8.a. above, LICENSOR has failed to elect to exercise said
option, LICENSEE may transfer, sell, lease or sublease the motor hotel on terms
no more favorable than those submitted to LICENSOR in writing, subject to
LICENSOR's approval of the prospective purchaser or lessee, as hereinafter
provided. LICENSOR shall have sixty (60) days from and after the expiration of
the aforementioned thirty (30) day period to approve or disapprove of the
prospective successor in writing. In the event the prospective successor is not
acceptable, LICENSOR shall notify the LICENSEE of this fact in writing. In such
event, LICENSEE shall not be permitted to transfer its interest in this
Agreement and in the License granted hereby to any other party without first
obtaining LICENSOR's approval. In the event of a transfer without LICENSOR's
prior approval, LICENSOR shall have the right to immediately terminate this
Agreement;
c. In the event the prospective successor is acceptable to LICENSOR,
such acceptance shall be conditioned upon the fact that the prospective
successor agrees to enter into the then current standard form of License
Agreement being offered by LICENSOR to prospective licensees with the royalty
provision stated in such form of agreement, but the requirement of initial
franchise fee or its equivalent shall be waived by LICENSOR; and
d. Upon any transfer of LICENSEE's interest in the motor hotel, the
successor or successors to LICENSEE, as a condition of their right to the
continued enjoyment of the benefits of this Agreement, and to reimburse LICENSOR
for its expenses in respect to reviewing the qualifications of the prospective
transferee, will be required at LICENSOR's option, to pay to LICENSOR a
nonrefundable license transfer fee of Ten Thousand Dollars ($10,000).
9. LICENSOR shall have the privilege, if LICENSEE desires to sell, lease,
sublease or otherwise transfer its rights to the motor hotel described in this
Agreement, to participate with real estate brokers in the listing of the said
property and in said transaction and to receive usual reasonable brokerage
commissions, fees and costs relating thereto, if LICENSOR procures a buyer or
lessee.
10. LICENSEE warrants that its execution of this AGREEMENT and use of the
marks "Travelodge(R)" and "Sleepy Bear(R)," as provided herein, are not a breach
of any agreement or covenant with any other person, firm or company. If any
person, firm or company shall claim that LICENSEE's execution of this Agreement
or use of the marks, "Travelodge(R)" or "Sleepy Bear(R)" is a breach of any such
agreement or covenant then LICENSEE will, at its cost and expense, defend such
against claim and pay, indemnify and
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save LICENSOR harmless from all liability and damages including costs and
attorney's fees which LICENSOR may incur or sustain in defending against any
such claims asserted by such other person, firm or company.
11. If LICENSEE is to occupy the described premises under a lease,
sublease or other written contract from the owner thereof, LICENSEE shall, prior
to the execution thereof, obtain LICENSOR's written approval of such lease,
sublease or other contract, and such instrument shall contain the express
covenant that throughout its term the premises shall be used solely and
exclusively as and for a motor hotel under all of the terms and conditions of
this Agreement, and that no assignment, transfer, change, modification or other
amendment of such instrument shall be entered into between the owner and
LICENSEE without the express consent in writing of LICENSOR, which consent shall
not be unreasonably withheld. This provision, however, shall be subject to the
right of LICENSOR to cancel this Agreement, as set forth in Subparagraph 8.b. of
this Agreement. If LICENSEE occupies said premises under a lease, sublease or
other contract with the owner as aforesaid, it is agreed that LICENSEE will
cause an "Owner's Consent" to the foregoing, in a form prescribed by LICENSOR,
to be executed and acknowledged by the owner of said premises within fifteen
(15) days after the day hereof, and if such Owner's Consent shall not be
obtained, LICENSOR shall have the option to terminate this Agreement.
12. LICENSOR agrees:
a. To make available consultation with LICENSOR's officials and
staff on matters relating hereto;
b. To make available, upon LICENSEE's request, information that
LICENSOR may have with respect to equipment, furniture, furnishings and
supplies, including prices thereof, necessary or convenient to operating
LICENSEE's motor hotel;
c. To assist LICENSEE in installing methods of motor hotel
operations found by LICENSOR to be sound and effective, and to provide
orientation in LICENSOR methods to personnel responsible for the management and
operation of the motor hotel (not to exceed three persons), selected by
LICENSEE. Such orientation shall be provided at such place as LICENSOR may
designate, and LICENSEE shall be responsible for the trainee's wages, board,
room and transportation expenses during the orientation period;
d. To encourage use by the traveling public of those motels and
motor hotels operating under licenses from LICENSOR or operated by joint
ventures in which LICENSOR or its affiliates are a party;
e. To furnish to LICENSEE lease terms or prices on signs, entrance
signs, decalcomania, forms, stationery and other items of a kind which are then
being made available to other licensees of LICENSOR. It is agreed that LICENSEE
need not lease or purchase any of the foregoing items from LICENSOR; however
LICENSOR shall have the
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right of prior approval of any such items to be leased or purchased by LICENSEE,
which approval shall not be unreasonably withheld; and
f. To make available to LICENSEE, at LICENSEE's request and at a
price to be agreed upon, any or all of the following:
i.) Formulation and implementation of an accounting/control system;
ii.) complete motor hotel accounting service, including preparation
of balance sheets, profit and loss statements, depreciation and
other schedules and income tax data; and
iii.) Advertising and promotional programs for use at local level.
13. No additional construction or substantial alteration shall be made
with respect to the motor hotel, unless working drawings and specifications and
color schemes are first approved in writing by LICENSOR, which approval shall
not be unreasonably withheld. Upon completion of an addition, LICENSEE agrees
to pay to LICENSOR Three Hundred Dollars ($300) per room for Travelodge and
Three Hundred Fifty Dollars ($350) per room for Travelodge Hotel for each
additional rental room added.
14. During the term of this Agreement, LICENSEE shall procure, carry and
pay for windstorm, fire and extended coverage insurance. The proceeds of any
such insurance, in the event of damage or destruction, shall be used to repair
or restore the buildings as nearly as possible to their original condition and
value.
15. LICENSEE agrees to indemnify and hold harmless LICENSOR, its officers,
agents and employees from loss, cost, damage, expense and liability, including
attorney's fees and court costs, by reason of damage or loss, including personal
injury, of whatsoever nature or kind, arising in connection with the business of
the motor hotel or out of, or as a result of, any negligent or intentional act
or failure to act on the part of LICENSEE, its agents, employees, tenants or
sub-tenants. LICENSEE agrees to place with an insurance company rated A - or
higher by Best's Key Rating Guide and reasonably approved by LICENSOR and keep
in effect during this Agreement, insurance for the benefit of LICENSOR (as well
as for LICENSEE) covering public liability, on a broad form basis with limits
not less than Five Million Dollars ($5,000,000) combined single limits for
bodily injury and property damage and include personal injury, products, liquor
legal liability and non-owned automobile coverage. LICENSOR is to be named as
an additional insured and in case of modification or cancellation of the
contract, LICENSOR is to be given 30 days notice. Insurance provisions are to
be approved by LICENSOR. In addition, LICENSEE agrees to provide proper
Worker's Compensation insurance covering all of its employees. LICENSEE further
agrees to deliver to LICENSOR the certificates naming LICENSOR as an additional
insured and to promptly pay all premiums on said policies as and when the same
become due.
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16. This Agreement contains the entire agreement of the parties, and no
representation, inducement, promise or agreement, oral or otherwise, not
embodied herein, shall be of any force or effect. No failure of LICENSOR to
exercise any power hereunder, or insist upon strict compliance by LICENSEE and
any obligation hereunder, and no custom or practice at variance with the terms
hereof shall constitute a waiver of LICENSOR's right to demand exact compliance
with the terms hereof. Waiver by LICENSOR of any default by LICENSEE shall not
affect or impair LICENSOR's rights in respect to any subsequent default of the
same or a different kind, or any delay or omission of LICENSOR to exercise any
right arising from any default shall affect or impair LICENSOR's right to the
same or any future default. Neither this Agreement nor any provision hereof may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing.
17. LICENSEE is an independent contractor, and LICENSOR and LICENSEE are
not and shall not be considered as joint venturers, partners, employees or
agents of each other, and neither shall have the power to bind or obligate the
other, except as set forth in this Agreement. LICENSEE shall hold itself out to
the public, and all those with whom it does business, as being independently
owned and operated, and to prominently display notice of its independent status
on all printed material associated with the subject property. LICENSOR and
LICENSEE have entered into this agreement for the pursuit of profit and
professional fulfillment. Each represents that it has substantial experience in
its prospective business and will not rely upon the expertise of the other in
the operation of its respective businesses.
18. LICENSEE hereby acknowledges that the License granted by this
Agreement is nonexclusive and that LICENSOR may own or operate, alone or in
conjunction with others through a joint venture or otherwise, motels or motor
hotels; and further may license others, on the same or different terms as the
within Agreement, to operate TRAVELODGE(R) and/or other motels or motor hotels
within the near vicinity of the subject motor hotel.
19. LICENSOR shall not be liable to any person or company for any debts
incurred with respect to the motor hotel and business or related business
thereof unless LICENSOR specifically agrees in writing to pay such debts.
LICENSEE agrees to indemnify and hold LICENSOR harmless from such debts,
including reasonable attorney's fees and court costs.
20. In any suit or action brought under the terms of this Agreement, a
reasonable attorney's fee of the prevailing party shall be fixed by the court
and shall be taxed as a part of the costs in favor of the prevailing party in
such suit or action.
21. Any action to enforce this Agreement shall be filed in, and shall be
governed by and construed in accordance with the laws of, the State of
California. The parties waive and will waive all right to jury trial of any
dispute either arising from the LICENSOR/LICENSEE relationship, or with respect
to this Agreement. The parties waive and will
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waive all right to seek punitive and/or exemplary damages in any action that
arises from the LICENSOR/LICENSEE relationship with respect to this Agreement.
The place of performance for this Contract shall be in San Diego
County, California. LICENSEE shall make the payments required by Paragraph 3 of
this Agreement and submit the statements required by Paragraph 4 of this
Agreement to LICENSOR at its principal place of business in El Cajon,
California.
22. All terms and words used in this Agreement, regardless of the number
and gender in which they are used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context or sense of this Agreement or any paragraph or clause
herein may require, as if such words had been fully and properly written in the
appropriate number and gender.
23. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but such
counterparts together shall constitute but one and the same instrument.
24. Should any part of this Agreement, for any reason, be declared or held
invalid, such invalidity shall not affect the validity of any remaining portion,
which remaining portion shall remain in force and effect as if this Agreement
had been executed with the invalid portion thereof eliminated; and it is hereby
declared the intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any such part,
parts or portion which may, for any reason, be hereafter declared invalid.
25. All notices pertaining to this Agreement by one party to the other
shall be sent by registered or certified mail: If to LICENSOR, addressed to it
at 0000 Xxxxxxxxxx Xxxxx, Xx Xxxxx, Xxxxxxxxxx 00000, and if to LICENSEE
addressed to it at 000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 or at such
other address as either of the parties shall designate by written notice to the
other from time to time. Service of any notice made by mail, or reliable
overnight delivery service in the manner herein provided shall be conclusively
deemed complete on the day of actual delivery as shown by the addressee's
registry or certification receipt, or at the expiration of the second day after
the date of mailing, whichever is earlier in time.
26. All rights under this Agreement shall inure to the benefit of the
successors and assigns of LICENSOR. This Agreement is not intended to benefit
any other person or entity except the named parties hereto and no other person
or entity shall be entitled to any rights hereunder by virtue of so-called
'third party beneficiary rights' or otherwise.
27. In the event LICENSEE or any successor of LICENSEE herein is a
corporation, partnership, joint venture or other entity other than named
individuals doing business under their own names, it agrees as follows:
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a. To furnish LICENSOR at the time of execution of this Agreement,
or if a successor, as a condition of obtaining LICENSOR's approval of such
transfer, a stockholders' agreement executed by all of its stockholders stating
that no such stockholder will sell, assign or transfer any of his stock to any
person or company other than his immediate family or persons who also are
stockholders, without the written consent of LICENSOR, which consent will not be
unreasonably withheld;
b. That no unissued stock will be issued to any person or company
other than its stockholders without the written consent of LICENSOR, which
consent will not be unreasonably withheld, and that it will furnish LICENSOR, at
the time of execution of this Agreement, or, if a successor, as a condition of
obtaining LICENSOR's approval of such transfer, a resolution of its Board of
Directors which has been ratified by the stockholders to such effect;
c. To furnish to LICENSOR, at the time of execution of this
Agreement, the name of a designated individual to act as representative of
LICENSEE in connection with all matters pertaining to this Agreement, which
designated individual will be conclusively presumed to have full authority to
act for LICENSEE in all matters, and in no event shall LICENSOR be responsible
for any action taken by such individual on behalf of LICENSEE; provided,
however, that the designated individual may be changed from time to time by
notice in writing to LICENSOR and, in the event of such notice, the previously
designated individual shall be deemed to have been replaced by the individual
named in such notice as of the date of receipt of such notice by LICENSOR; and
d. That in the event of a violation of the provisions of
Subparagraphs a., b. or c. above, or in the event stock is sold, assigned,
transferred or issued in violation of said stockholder's agreement or
resolution, LICENSOR shall have the option and right, after giving LICENSEE
thirty (30) days written notice in which to cure said violations, to forthwith
cancel and terminate this Agreement, and thereupon the rights and obligations
hereunder shall cease, but such termination shall not affect the obligations
hereunder of LICENSEE to take action or abstain from taking action after the
termination hereof as provided elsewhere in this Agreement, nor shall it affect
the responsibility of LICENSEE for damages or sums due as provided in Paragraph
2.a. above.
28. LICENSOR may accept any check or payment in any amount without
prejudice to LICENSOR's right to recover the balance of the amount due or to
pursue any other right or remedy. No endorsement or statement on any check or
payment or in any letter accompanying any check or payment or elsewhere shall
constitute or be construed as an accord or satisfaction.
29. The expiration or termination of this Agreement shall be without
prejudice to any rights of LICENSOR against LICENSEE and such expiration or
termination shall not relieve LICENSEE of any of its obligations to LICENSOR
existing at the time of expiration or termination or terminate those obligations
of LICENSEE which, by their nature, survive
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the expiration or termination of this Agreement. LICENSEE is obligated to
return, at no expense to the LICENSOR, any and all copies of the operations
manual, other manuals and any other communications media and material provided
for LICENSEE's use without additional charge in connection with the operation of
the Franchised Business.
30. Notwithstanding anything contained herein to the contrary, the
following special stipulations shall be controlling:
a. Paragraph 2.b.(i) hereof is modified by inserting the word
"material" between the words "any" and "covenant" and between the words "any"
and "standard" in the first line thereof.
b. Paragraph 2.b.(iii) hereof is modified by adding at the end
thereof the words "which approval shall not be unreasonably withheld or
delayed".
c. The percentage of Gross Room Revenue to be paid to the Licensor
Marketing Fund pursuant to Paragraph 3.c. shall be four percent (4%) which
percent may be changed by the Board of Directors of LICENSOR in its discretion,
provided that any increases therein shall be limited to increases reasonably
required to cover the cost of providing the services funded by the Licensor
Marketing Fund.
d. In calculating Gross Room Revenue under Paragraph 3.f. hereof,
there shall also be excluded from the receipts described therein separate
charges to guests for food and beverage, room service, telephone charges, key
forfeitures and entertainment, and vending machine receipts.
e. Paragraphs 8.a., 8.b., 8.c. and 8.d. are deleted.
f. Paragraph 9 is deleted.
g. Paragraph 10 is modified by deleting the second sentence thereof
and inserting in lieu thereof the following:
Licensor will indemnify, defend and hold harmless LICENSEE, to
the fullest extent permitted by law, from and against all losses,
liability and expenses (including reasonable attorney's fees)
incurred by LICENSEE in any action or claim arising from
LICENSEE's proper use of the System and the marks licensed
hereunder alleging that LICENSEE's use of the System and such
marks is an infringement of a third party's rights to any trade
secret, patent, copyright, trademark, servicemark or trade name.
LICENSEE shall promptly notify LICENSOR in writing when any such
infringement claim or action is commenced or threatened and
LICENSEE shall cooperate in the defense and resolution of such
action or claim. Any such claim or action may be resolved by
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LICENSOR requiring that LICENSEE modify its use of the infringing
or allegedly infringing property to avoid said infringement, so
long as such modification does not materially adversely affect
LICENSEE's operation of the motor hotel which is licensed
hereunder.
h. Paragraph 11 hereof is deleted.
i. Paragraph 27 is deleted. LICENSEE agrees that the transfer of
more than 20% of the currently outstanding equity of LICENSEE, or the issuance
of more than 20% of additional equity in, LICENSEE in either case without the
written consent of LICENSOR, shall be a breach of this Agreement by LICENSEE
permitting the LICENSOR to terminate this Agreement for cause.
j. Paragraph 12.e. hereof is modified by deleting the word
"decalcomania" therefrom.
k. The parties establish the following schedule of liquidated
damages payable by LICENSEE to LICENSOR within 15 days after termination of this
Agreement prior to expiration of the Term by LICENSOR with cause or by LICENSEE
without cause, insofar as actual damages are difficult to predict and this
formula is a reasonable pre-estimate of the actual damages to be suffered by
LICENSOR as a result of premature termination of this Agreement. LICENSEE shall
pay to LICENSOR the product of the aggregate payments due from LICENSEE pursuant
to Paragraph 3.b. (whether or not paid by LICENSEE) during the last twelve (12)
months the LICENSEE was part of the TRAVELODGE System under this Agreement,
multiplied by the "Factor." If the LICENSEE has not been a part of the
TRAVELODGE System under this Agreement for at least twelve (12) months, the
parties agree that liquidated damages shall be calculated by taking the average
of monthly payments due from LICENSEE pursuant to Paragraph 3.b. (whether or not
paid by LICENSEE) under this Agreement times twelve (12), then multiplying by
the Factor. If the termination occurs before the end of the fourth year of the
Term, then the Factor will be five (5). If the termination occurs during the
fifth year of the Term, the Factor will be four (4). If the termination occurs
during the sixth year of the Term, the Factor will be three (3). If the
termination occurs after the sixth year of the Term, the Factor will be two (2).
l. LICENSEE and any assignee or successor of the original LICENSEE
may assign this Agreement to, the lessee or transferee of fee simple title to
the motor hotel upon thirty (30) days prior written notice to LICENSOR at any
time during the Term when LICENSEE is not in default under this Agreement
without payment of an application, initial or transfer fee by LICENSEE or the
assignee provided that (1) the assignee completes and returns to LICENSOR at
least fifteen (15) days before the transfer of possession or title, whichever
comes first, LICENSOR's standard license applications, (2) the assignee is
reasonably acceptable to LICENSOR, (3) for a period ending on the seventh
anniversary of the date of execution of this Agreement, LICENSEE remains
primarily liable for the timely and full payment of the Licensee's obligations
under this Agreement for the payment of
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liquidated damages in accordance with Paragraph 30.k., and (4) the assignee
assumes this Agreement by writing acceptable to and directly enforceable by
LICENSOR. From and after said seventh anniversary, LICENSEE shall have no
further liability under this subparagraph 1.
m. LICENSEE may terminate this Agreement at any time without
incurring the damages provided in Paragraph 30.k., provided that LICENSEE shall
have entered into a license or franchise agreement with another subsidiary of
HFS Incorporated ("HFS") providing for the operation of the Property as part of
the franchise system owned by said subsidiary, which agreement shall be in the
then current standard form of license or franchise agreement being offered to
prospective licensees or franchisees by said subsidiary in its then current
Uniform Franchise Offering Circular for the state in which the Property is
located. Such agreement shall be modified to include liquidated damages and
assignment provisions substantially the same as Paragraphs 30.k. and 30.1.
hereof, after giving effect to the expiration of the period prior to such
termination of this Agreement, and a term at least equal to the unexpired
portion of the original term of this Agreement. LICENSEE acknowledges that
neither HFS nor any subsidiary of HFS shall be obligated to enter into any
license or franchise agreement with LICENSEE with respect to the Property.
{SIGNATURE PAGE TO FOLLOW}
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IN WITNESS WHEREOF, the undersigned have set their hands and seals as of the
day and year first above written.
FORTE HOTELS, INC.
a California corporation a Delaware corporation
by__________________________ _____________________________
by__________________________ _____________________________
"LICENSOR" "LICENSEE"
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EXHIBIT B
-00-
XXXXXXX X-0
Xxxxxxxx: Xxxxxxx, Xxx Xxxx
Entity No. ________________
Unit No.: _________________
RAMADA FRANCHISE SYSTEMS, INC.
LICENSE AGREEMENT
-----------------
THIS LICENSE AGREEMENT ("Agreement"), dated _______________, 19___, is
between RAMADA FRANCHISE SYSTEMS, INC., a Delaware corporation ("we", "our" or
"us"), and Forte Hotels, Inc., a Delaware corporation ("you"). The definitions
of capitalized terms are found in Appendix A. In consideration of the following
mutual promises, the parties agree as follows:
1. LICENSE. We acquired from Franchise Systems Holdings, Inc. ("FSH") pursuant
-------
to the Master License Agreements the right to use and to sublicense certain
trade names, trademarks and service marks including the Marks and the
distinctive Ramada System for providing transient guest lodging services to the
public under the "RAMADA" name and certain services to its licensees, including
the Reservation System, advertising, marketing and training services. We have
the exclusive right to license and franchise to you the distinctive "Ramada"
System for providing transient guest lodging services. We grant to you and you
accept the License, effective and commencing on the Opening Date and ending on
the earliest to occur of the Term's expiration, a Transfer or a Termination.
You will call the Facility a "Ramada Plaza Hotel." You may adopt additional or
secondary designations for the Facility with our prior written consent, which we
may withhold, condition, or withdraw on written notice in our sole discretion.
2. RAMADA INNS NATIONAL ASSOCIATION.
--------------------------------
2.1 MEMBERSHIP. You automatically become a member of the Ramada Inns National
Association ("RINA"), an unincorporated association. Other Chain licensees are
also members of RINA. RINA may consider and discuss common issues relating to
advertising and operation of facilities in the System and, through its Executive
Committee, make recommendations to us regarding such issues and other matters.
2.2 ANNUAL CONFERENCE. A RINA conference is held each year. The conference
date and location will be determined by the RINA Executive Committee after
consultation with us. You will pay not less than one "Conference Registration
Fee" for each Facility you own. When you pay the Conference Registration Fee,
you may send your representative to the conference. Additional Facility
representatives may attend subject to conference policies and after payment of
an additional Conference Registration Fee for each such additional attendee.
You will pay the costs of
transportation, lodging and meals (except those we provide as part of the
Conference) for your attendees.
3. YOUR IMPROVEMENT AND OPERATING OBLIGATIONS. Your obligations to improve,
operate and maintain the Facility are:
3.1 IMPROVEMENTS. You must select and acquire the Location and acquire, equip
and supply the Facility in accordance with System Standards. You must provide
us with proof that you own or lease the Facility before or within 30 days after
the Effective Date. You must begin renovation of the Facility no later than
thirty (30) days after the Effective Date. The deadline for completing the pre-
opening phase of conversion and renovation, when the Facility must score at
least 450 points (or equivalent) under our quality assurance inspection system
and be ready to open for business under the System, is ninety (90) days after
the Effective Date. All renovations will comply with System Standards, any
Approved Plans, Schedule B and any Punch List attached to this Agreement. Your
general contractor or you must carry the insurance required under this Agreement
during renovation. You must complete the pre-opening renovation specified on
the Punch List and the Facility must pass its pre-opening quality assurance
inspection with a score of at least 450 points (or equivalent) before we
consider the Facility to be ready to open under the System. You must continue
renovation and improvement of the Facility after the Opening Date as the Punch
List requires and pass a post-opening quality assurance inspection within nine
(9) months after the Opening Date. We may, in our sole discretion, terminate
this Agreement by giving written notice to you (subject to applicable law) if
(1) you do not commence or complete the pre-opening or post-opening improvements
of the Facility by the dates specified in this Section, or (2) you prematurely
identify the Facility as a Chain Facility or begin operation under the System
name described in Schedule B in violation of Section 3.3 and you fail to either
complete the pre-opening Improvement Obligation or cease operating and/or
identifying the Facility under the Marks and System within five days after we
send you written notice of default. Time is of the essence for the Improvement
Obligation. We may, however, in our sole discretion, grant one or more
extensions of time to perform any phase of the Improvement Obligation. You will
pay us a non-refundable extension fee of $2.00 per room for each day of any
extension of the deadline for completing pre-opening improvements. This fee
will be payable to us after each 30 days of the extension. You will pay us the
balance of the extension fee outstanding when the Facility opens under the
System 10 days after the Opening Date. The grant of an extension will not waive
any other default existing at the time the extension is granted.
3.2 IMPROVEMENT PLANS. You will create plans and specifications for the work
described in Section 3.1 (based upon the System
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Standards and this Agreement) if we so request and submit them for our approval
before starting improvement of the Location. We will not unreasonably withhold
or delay our approval, which is intended only to test compliance with System
Standards, and not to detect errors or omissions in the work of your architects,
engineers, contractors or the like. Our review does not cover technical,
architectural or engineering factors, or compliance with federal, state or local
laws, regulations or code requirements. We will not be liable to your lenders,
contractors, employees, guests, others or you on account of our review or
approval of your plans, drawings or specifications, or our inspection of the
Facility before, during or after renovation or construction. Any material
variation from the Approved Plans requires our prior written approval. You will
promptly provide us with copies of permits, job progress reports, and other
information as we may reasonably request. We may inspect the work while in
progress without prior notice.
3.3 PRE-OPENING. You may identify the Facility as a Chain Facility prior to
the Opening Date, or commence operation of the Facility under a Xxxx and using
the System, only after first obtaining our approval or as permitted under and
strictly in accordance with the System Standards Manual. If you identify the
Facility as a Chain Facility or operate the Facility under a Xxxx before the
Opening Date without our express written consent, then in addition to our
remedies under Sections 3.1 and 11.2, you will begin paying the Royalty to us,
as specified in Section 7.1, from the date you identify or operate the Facility
using the Xxxx. We may delay the Opening Date until you pay the Royalty
accruing under this Section.
3.4 OPERATION. You will operate and maintain the Facility continuously after
the Opening Date on a year-round basis as required by System Standards and offer
transient guest lodging and other related services of the Facility (including
those specified on Schedule B) to the public in compliance with the law and
System Standards. You will keep the Facility in a clean, neat, and sanitary
condition. You will clean, repair, replace, renovate, refurbish, paint, and
redecorate the Facility and its FF&E as and when needed to comply with System
Standards. The Facility will be managed by either a management company or an
individual manager with significant training and experience in general
management of similar lodging facilities. The Facility will accept payment from
guests by all credit and debit cards we designate in the System Standards
Manual. You may add to or discontinue the amenities, services and facilities
described in Schedule B, or lease or subcontract any service or portion of the
Facility, only with our prior written consent which we will not unreasonably
withhold or delay. Your front desk operation, telephone system, parking lot,
swimming pool and other guest service facilities may not be shared with or used
by guests of another lodging or housing facility.
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3.5 TRAINING. You (or a person with executive authority if you are an
entity) and the Facility's general manager will attend the training programs
described in Section 4.1 we designate as mandatory for licensees or general
managers, respectively. You will train or cause the training of all Facility
personnel as and when required by System Standards and this Agreement. You will
pay for all travel, lodging, meals and compensation expenses of the people you
send for training programs, the cost of training materials and other reasonable
charges we may impose for training under Section 4.1, and all travel, lodging,
meal and facility and equipment rental expenses of our representatives if
training is provided at the Facility.
3.6 MARKETING. You will participate in System marketing programs, including
the Directory and the Reservation System. You will obtain and maintain the
computer and communications service and equipment we specify to participate in
the Reservation System. You will comply with our rules and standards for
participation, and will honor reservations and commitments to guests and travel
industry participants. You may implement, at your option and expense, your own
local advertising. Your advertising materials must use the Marks correctly, and
must comply with System Standards or be approved in writing by us prior to
publication. You will stop using any non-conforming, out-dated or misleading
advertising materials if we so request.
3.6.1 You will participate in any regional marketing, training or management
alliance or cooperative of Chain licensees formed to serve the Chain Facilities
in your area. We may assist the cooperative collect contributions. You may be
excluded from cooperative programs and benefits if you don't participate in all
cooperative programs according to their terms, including making payments and
contributions when due.
3.7 GOVERNMENTAL MATTERS. You will obtain as and when needed all governmental
permits, licenses and consents required by law to construct, acquire, renovate,
operate and maintain the Facility and to offer all services you advertise or
promote. You will pay when due or properly contest all federal, state and local
payroll, withholding, unemployment, beverage, permit, license, property, ad
valorem and other taxes, assessments, fees, charges, penalties and interest, and
will file when due all governmental returns, notices and other filings.
3.8 INSPECTIONS AND AUDITS. You will permit our representatives to perform
quality assurance inspections of the Facility and audit your financial and
operating books and records (including tax returns) relating to the Facility and
any related business, with or without prior notice of the inspection or audit.
The inspections and audits will commence during normal business hours, although
we may observe Facility operation and accounting
-4-
activity at any time. You, the Facility staff and your other agents and
employees will cooperate with our inspectors and auditors in the performance of
their duties. You will pay us any underpayment of, and we will pay you or
credit your Recurring Fee account for any overpayment of, Recurring Fees
discovered by an audit. You will pay the reasonable travel, lodging and meal
expenses of our reinspection or audit and any reinspection fee we may impose if
the Facility does not pass an inspection, you refuse to cooperate with our
auditors or inspectors, or the audit reveals that you paid us less than 97% of
the correct amount of Recurring Fees. We may publish or disclose the results of
quality assurance inspections.
3.9 REPORTS AND ACCOUNTING. You will prepare and submit timely monthly reports
containing the information we require about the Facility's performance during
the preceding month. You will prepare and submit other reports and information
about the Facility as we may reasonably request from time to time or in the
System Standards Manual. You will maintain accounting books and records in
accordance with generally accepted accounting principles and the American Hotel
& Motel Association Uniform System of Accounts for Hotels, as amended, subject
to this Agreement and other reasonable accounting standards we may specify from
time to time. You will prepare and submit to us if we so request your annual
and semiannual financial statements. We do not require that your financial
statements be independently audited, but you will send us a copy of your audited
statements if you have them audited and we ask for them.
3.10 INSURANCE. You will obtain and maintain during the Term of this Agreement
the insurance coverage required under the System Standards Manual from insurers
meeting the standards established in the Manual. Unless we instruct you
otherwise, your liability insurance policies will name Ramada Franchise Systems,
Inc. and HFS Incorporated as additional insureds.
3.11 CONFERENCES. You or your representative will attend each annual RINA
conference and pay the Conference Registration Fee described in Section 2.2.
Mandatory recurrent training for licensees and general managers described in
Section 4.1.3 may be held at a RINA conference. The Fee will be the same for
all Chain Facilities that we license in the United States. You will receive
reasonable notice of a Chain conference.
3.12 PURCHASING. You will purchase or obtain certain items we designate as
proprietary or that bear Marks from suppliers we approve. You may purchase any
other items for the Facility from any competent source you select, so long as
the items meet or exceed System Standards.
3.13 GOOD WILL. You will use reasonable efforts to protect, maintain and
promote the name "Ramada" and its distinguishing
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characteristics, and the other Marks. You will not permit or allow your
officers, directors, principals, employees, representatives, or guests of the
Facility to engage in conduct which is unlawful or damaging to the good will or
public image of the Chain or System. You will participate in Chain-wide guest
service and satisfaction guaranty programs we require in good faith for all
Chain Facilities. You will follow System Standards for identification of the
Facility and for you to avoid confusion on the part of guests, creditors,
lenders, investors and the public as to your ownership and operation of the
Facility, and the identity of your owners.
3.14 FACILITY MODIFICATIONS. You may materially modify, diminish or expand the
Facility (or change its interior design, layout, FF&E, or facilities) only after
you receive our prior written consent, which we will not unreasonably withhold
or delay. You will pay our Rooms Addition Fee then in effect for each guest
room you add to the Facility. If we so request, you will obtain our prior
written approval of the plans and specifications for any material modification,
which we will not unreasonably withhold or delay. You will not open to the
public any material modification until we inspect it for compliance with the
Approved Plans and System Standards.
3.15 COURTESY LODGING. You will provide lodging at the "Employee Rate"
established in the System Standards Manual from time to time (but only to the
extent that adequate room vacancies exist) to our representatives traveling on
business, but not more than three standard guest rooms at the same time.
3.16 MINOR RENOVATIONS. Beginning three years after the Opening Date, we may
issue a "Minor Renovation Notice" to you that will specify reasonable Facility
upgrading and renovation requirements (a "Minor Renovation") to be commenced no
sooner than 60 days after the notice is issued, having an aggregate cost for
labor, FF&E and materials estimated by us to be not more than the Minor
Renovation Ceiling Amount. You will perform the Minor Renovations as and when
the Minor Renovation Notice requires. We will not issue a Minor Renovation
Notice within three years after the date of a prior Minor Renovation Notice, or
if the three most recent quality assurance inspection scores of the Facility
averaged at least 450 points or equivalent and the most recent quality assurance
inspection score for the Facility was at least 425 points or equivalent when the
Facility is otherwise eligible for a Minor Renovation.
4. OUR OPERATING AND SERVICE OBLIGATIONS. We will provide you with the
-------------------------------------
following services and assistance:
4.1 TRAINING. We will offer general manager training, property opening,
recurrent training and supplemental training.
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4.1.1 MANAGEMENT TRAINING. Between 60 days before and six months after the
projected Opening Date, we will offer at a location in the United States we
designate, and the Facility general manager must complete a training program to
our satisfaction. The training program will not exceed two weeks in duration
and will cover such topics as System Standards, services available from us, and
operating a Chain Facility. We may charge you a reasonable fee for materials
for each manager trainee. Each manager's training program may vary depending on
his or her prior training and experience. Any replacement general manager of
the Facility must complete the training program within the time specified in the
System Standards Manual. No tuition will be charged for your first
participation in this training but you must pay for your representative's
travel, lodging, meals, incidental expenses, compensation and benefits. We may
charge you reasonable tuition for training for replacement managers.
4.1.2 PROPERTY OPENING TRAINING. We will provide at the Facility or another
agreed location, a "Property Training Program" (at our discretion as to length
and scheduling) to assist you in opening the Facility. There is no charge for
the Property Training Program other than for the reasonable expenses for travel,
room, board and other out-of-pocket costs of our representatives.
4.1.3 RECURRENT TRAINING. We will provide training for you and the Facility's
managers if we determine that additional training for licensees and managers is
necessary from time to time. Training will be held in our U.S. training center
or other locations, or in conjunction with regional workshops or conferences.
You will pay for your representative's travel, lodging, meals, incidental
expenses, compensation and benefits for this training. We may charge reasonable
tuition for refresher courses and regional workshops. This training may be held
in conjunction with a Chain conference.
4.1.4 SUPPLEMENTAL TRAINING. We may offer optional training programs without
charge or for tuition. We may offer or sell to you video tapes, computer discs
or other on-site training aids and materials, or require you to buy them at
reasonable prices.
4.1.5 We may charge you a reasonable cancellation fee if you cancel your
training program commitments or reservations within 30 days (or such shorter
period as we may specify) before the start of any training program at which you
or your representative has a reservation. We may charge you tuition for your
representatives to attend mandatory sessions other than those people we require
to attend the training and fees for instructional materials.
-7-
4.2 RESERVATION SYSTEM. We will operate and maintain (directly or by
subcontracting with an affiliate or one or more third parties), with funds
allocated from the collections of the RINA Services Assessment Fee, a
computerized Reservation System or such technological substitute(s) as we
determine, in our discretion. We will use the allocated RINA Services
Assessment Fees for the acquisition, development, support, equipping,
maintenance, improvement and operation of the Reservation System. We will
provide software maintenance for the software we license to you to connect to
the Reservation System if your Recurring Fee payments are up to date. The
Facility will participate in the Reservation System, commencing with the Opening
Date for the balance of the Term. We have the right to provide reservation
services to lodging facilities other than Chain Facilities or to other parties.
We will not offer callers to our general consumer toll free reservation
telephone number in the United States the opportunity to make reservations for
other lodging chains.
4.3 MARKETING.
4.3.1 We will promote public awareness and usage of Chain Facilities with funds
allocated from collections of the RINA Services Assessment Fees by implementing
advertising, promotion, publicity, market research and other marketing programs,
training programs and related activities, and the production and distribution of
Chain publications and directories of hotels. We will determine in our
discretion: (i) The nature and type of media placement; (ii) The allocation (if
any) among international, national, regional and local markets; and (iii) The
nature and type of advertising copy, other materials and programs. We or an
affiliate may be reimbursed for the reasonable direct and indirect costs,
overhead or other expenses of providing marketing services. We are not
obligated to supplement or advance funds available from collections of the RINA
Services Assessment Fees to pay for marketing activities. We do not promise
that the Facility or you will benefit directly or proportionately from marketing
activities.
4.3.2 We may, at our discretion, implement special international, national,
regional or local promotional programs (which may or may not include the
Facility) and may make available to you (to use at your option) media
advertising copy and other marketing materials for prices which reasonably cover
the materials' direct and indirect costs.
4.3.3 We will publish the Chain Directory. We will include the Facility in the
Chain Directory after it opens if you submit the information we request on time,
and you are not in default under this Agreement at the time we must arrange for
publication. We will supply Directories to you for display at locations
specified in the System Standards Manual or policy statements. We may assess
you a reasonable charge for the direct and indirect
-8-
expenses (including overhead) of producing and delivering the Directories.
4.4 PURCHASING. We may offer optional assistance to you with purchasing items
used at or in the Facility. Our affiliates may offer this service on our
behalf. We may restrict the vendors authorized to sell proprietary or Xxxx-
bearing items in order to control quality, provide for consistent service or
obtain volume discounts. We will maintain and provide to you lists of suppliers
approved to xxxxxxx Xxxx-bearing items, or whose products conform to System
Standards.
4.5 THE SYSTEM. We will control and establish requirements for all aspects of
the System. We may, in our discretion, change, delete from or add to the
System, including any of the Marks or System Standards, in response to changing
market conditions. We may, in our discretion, permit deviations from System
Standards, based on local conditions and our assessment of the circumstances.
4.6 CONSULTATIONS AND STANDARDS COMPLIANCE. We will assist you to understand
your obligations under System Standards by telephone, mail, during quality
assurance inspections, through the System Standards Manual, at training sessions
and during conferences and meetings we conduct. We will provide telephone and
mail consultation on Facility operation and marketing through our
representatives.
4.7 SYSTEM STANDARDS MANUAL AND OTHER PUBLICATIONS. We will specify System
Standards in the System Standards Manual, policy statements or other
publications. We will lend you one copy of the System Standards Manual promptly
after we sign this Agreement. We will send you any System Standards Manual
revisions and/or supplements as and when issued. We will send you all other
publications for Chain licensees and all separate policy statements in effect
from time to time.
4.8 INSPECTIONS AND AUDITS. We have the unlimited right to conduct unannounced
quality assurance inspections of the Facility and its operations, records and
Xxxx usage to test the Facility's compliance with System Standards and this
Agreement, and the audits described in Section 3.8. We have the unlimited right
to reinspect if the Facility does not achieve the score required on an
inspection. We may impose a reinspection fee and will charge you for our
reasonable costs of travel, lodging and meals for any reinspection, or for an
audit if you pay less than 97% of the correct amount of Recurring Fees. Our
inspections are solely for the purposes of checking compliance with System
Standards.
5. TERM. The Term begins on the Effective Date and expires on the day prior to
----
the fifteenth anniversary of the Opening Date. Some of your duties and
obligations will survive termination or
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expiration of this Agreement. You will execute and deliver to us with this
Agreement a notarized Declaration of License Agreement in recordable form. We
will countersign and return one copy of the Declaration to you. We may, at our
option, record the Declaration in the real property records of the county where
the Facility is located. The Declaration will be released at your request and
expense when this Agreement terminates or expires and you perform your post-
termination obligations. NEITHER PARTY HAS RENEWAL RIGHTS OR OPTIONS.
6. APPLICATION AND INITIAL FEES. The application fee and initial fee shall be
----------------------------
waived.
7. RECURRING FEES, TAXES AND INTEREST.
----------------------------------
7.1 You will pay us certain "Recurring Fees" in U.S. dollars (or such other
currency as we may direct if the Facility is outside the United States) fifteen
days after the month in which they accrue, without billing or demand. Recurring
Fees include the following:
7.1.1 A "Royalty" equal to four percent (4.0%) of Gross Room Revenues of the
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Facility accruing during the calendar month, accrues from the earlier of the
Opening Date or the date you identify the Facility as a Chain Facility or
operate it under a Xxxx until the end of the Term.
7.1.2 A "RINA Services Assessment Fee" as set forth in Schedule C for
----------------------------
advertising, marketing, training, the Reservation System and other related
services and programs, accrues from the Opening Date until the end of the Term.
On behalf of RINA, we collect and deposit the Fees from licensees, then disburse
and administer the funds collected by means of a separate account or accounts.
The RINA Services Assessment Fee is subject to change for all Chain Facilities,
and new fees and charges may be assessed for new services, by substituting a new
Schedule C or otherwise, but only upon the recommendation of the RINA Executive
Committee and after our approval. You will also pay or reimburse us for travel
agent commissions paid for reservations at the Facility and other fees levied to
pay for reservations for the Facility originated or processed through other
reservation systems and networks. We may charge a reasonable service fee for
this service. We may charge Facilities using the Reservation System outside the
United States for reservation service using a different formula. We may use the
RINA Services Assessment Fees we collect, in whole or in part, to reimburse our
reasonable direct and indirect costs, overhead or other expenses of providing
marketing, training and reservation services.
7.2 You will pay to us "Taxes" equal to any federal, state or local sales,
-----
gross receipts, use, value added, excise or similar taxes assessed against us on
the Recurring Fees by the
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jurisdictions where the Facility is located, but not including any income tax,
franchise or other tax for the privilege of doing business by us in your State.
You will pay Taxes to us when due.
7.3 "Interest" is payable when you receive our invoice on any past due amount
--------
payable to us under this Agreement at the rate of 1.5% per month or the maximum
rate permitted by applicable law, whichever is less, accruing from the due date
until the amount is paid.
7.4 If a transfer occurs, your transferee or you will pay us our then current
Application Fee and a "Relicense Fee" equal to the Initial Fee we would then
-------------
charge a new licensee for the Facility.
8. INDEMNIFICATIONS.
----------------
8.1 Independent of your obligation to procure and maintain insurance, you will
indemnify, defend and hold the Indemnitees harmless, to the fullest extent
permitted by law, from and against all Losses and Expenses, incurred by any
Indemnitee for any investigation, claim, action, suit, demand, administrative or
alternative dispute resolution proceeding, relating to or arising out of any
transaction, occurrence or service at, or involving the operation of the
Facility, any breach or violation of any contract or any law, regulation or
ruling by, or any act, error or omission (active or passive) of, you, any party
associated or affiliated with you or any of the owners, officers, directors,
employees, agents or contractors of you or your affiliates, including when the
active or passive negligence of any Indemnitee is alleged or proven. You have
no obligation to indemnify an Indemnitee for damages to compensate for property
damage or personal injury if a court of competent jurisdiction makes a final
decision not subject to further appeal that the Indemnitee engaged in wilful
misconduct or intentionally caused such property damage or bodily injury. This
exclusion from the obligation to indemnify shall not, however, apply if the
property damage or bodily injury resulted from the use of reasonable force by
the Indemnitee to protect persons or property.
8.2 You will respond promptly to any matter described in the preceding
paragraph, and defend the Indemnitee. You will reimburse the Indemnitee for all
costs of defending the matter, including attorneys' fees, incurred by the
Indemnitee if your insurer or you do not assume defense of the Indemnitee
promptly when requested. We must approve any resolution or course of action in
a matter that could directly or indirectly have any adverse effect on us or the
Chain, or could serve as a precedent for other matters.
8.3 We will indemnify, defend and hold you harmless, to the fullest extent
permitted by law, from and against all Losses and Expenses incurred by you in
any action or claim arising from your
-11-
proper use of the System alleging that your use of the System and any property
we license to you is an infringement of a third party's rights to any trade
secret, patent, copyright, trademark, service xxxx or trade name. You will
promptly notify us in writing when you become aware of any alleged infringement
or an action is filed against you. You will cooperate with our defense and
resolution of the claim. We may resolve the matter by obtaining a license of
the property for you at our expense, or by requiring that you discontinue using
the infringing property or modify your use to avoid infringing the rights of
others.
9. YOUR ASSIGNMENTS, TRANSFERS AND CONVEYANCES.
-------------------------------------------
9.1 TRANSFER OF THE FACILITY. This Agreement is personal to you (and your
owners if you are an entity). We are relying on your experience, skill and
financial resources (and that of your owners and the guarantors, if any) to sign
this Agreement with you. You may finance the Facility and xxxxx x xxxx,
security interest or encumbrance on it without notice to us or our consent. If
a Transfer is to occur, the transferee or you must comply with Section 9.3.
Your License terminates when the Transfer occurs. If the transferee does not
sign a replacement license agreement with us before you give the transferee
ownership or possession of the Facility, then the License terminates when you
transfer ownership or possession of the Facility. The transferee may not
operate the Facility under the System, and you are responsible for performing
the post-termination obligations in Section 13. You and your owners may, only
with our prior written consent and after you comply with Sections 9.3 and 9.6,
assign, pledge, transfer, delegate or grant a security interest in all or any of
your rights, benefits and obligations under this Agreement, as security or
otherwise. Transactions involving Equity Interests that are not Equity
Transfers do not require our consent and are not Transfers.
9.2 PUBLIC OFFERINGS AND REGISTERED SECURITIES. You may engage the first
registered public offering of your Equity Interests only after you pay us a
public offering fee equal to $15,000. Your Equity Interests (or those of a
person, parent, subsidiary, sibling or affiliate entity, directly or indirectly
effectively controlling you), are freely transferable without the application of
this Section if they are, on the Effective Date, or after the public offering
fee is paid, they become, registered under the federal Securities Act of 1933,
as amended, or a class of securities registered under the Securities Exchange
Act of 1934, as amended, or listed for trading on a national securities exchange
or the automated quotation system of the National Association of Securities
Dealers, Inc. (or any successor system), provided that any tender offer for at
least a majority of your Equity Interests will be an Equity Transfer subject to
Section 9.1.
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9.3 CONDITIONS. We may, to the extent permitted by applicable law, condition
and withhold our consent to a Transfer when required under this Section 9 until
the transferee and you meet certain conditions. If a Transfer is to occur, the
transferee (or you, if an Equity Transfer is involved) must first complete and
submit our Application, qualify to be a licensee in our sole discretion, given
the circumstances of the proposed Transfer, provide the same supporting
documents as a new license applicant, pay the Application and Relicense Fees
then in effect, sign the form of License Agreement we then offer in conversion
transactions and agree to renovate the Facility as if it were an existing
facility of similar age and condition converting to the System, as we reasonably
determine. We will provide a Punch List of improvements we will require after
the transferee's Application is submitted to us. We must also receive general
releases from you and each of your owners, and payment of all amounts then owed
to us and our affiliates by you, your owners, your affiliates, the transferee,
its owners and affiliates, under this Agreement or otherwise. Our consent to
the transaction will not be effective until these conditions are satisfied.
9.4 PERMITTED TRANSFEREE TRANSACTIONS. You may transfer an Equity Interest or
effect an Equity Transfer to a Permitted Transferee without obtaining our
consent, renovating the Facility or paying a Relicense Fee or Application Fee.
No Transfer will be deemed to occur. You also must not be in default and you
must comply with the application and notice procedures specified in Sections 9.3
and 9.6. Each Permitted Transferee must first agree in writing to be bound by
this Agreement, or at our option, execute the License Agreement form then
offered prospective licensees. No transfer to a Permitted Transferee shall
release a living transferor from liability under this Agreement or any guarantor
under any Guaranty of this Agreement. You must comply with this Section if you
transfer the Facility to a Permitted Transferee. A transfer resulting from a
death may occur even if you are in default under this Agreement.
9.5 ATTEMPTED TRANSFERS. Any transaction requiring our consent under this
Section 9 in which our consent is not first obtained shall be void, as between
you and us. You will continue to be liable for payment and performance of your
obligations under this Agreement until we terminate this Agreement, all your
financial obligations to us are paid and all System identification is removed
from the Facility.
9.6 NOTICE OF TRANSFERS. You will give us at least 30 days prior written
notice of any proposed Transfer or Permitted Transferee transaction. You will
notify us when you sign a contract to Transfer the Facility and 10 days before
you intend to close on the transfer of the Facility. We will respond to all
requests for our consent and notices of Permitted Transferee transactions within
a reasonable time not to exceed 30 days. You
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will notify us in writing within 30 days after a change in ownership of 25% or
more of your Equity Interests that are not publicly held or that is not an
Equity Transfer, or a change in the ownership of the Facility if you are not its
owner. You will provide us with lists of the names, addresses, and ownership
percentages of your owner(s) at our request.
10. OUR ASSIGNMENTS. We may assign, delegate or subcontract all or any part of
---------------
our rights and duties under this Agreement, including by operation of law,
without notice and without your consent. We will have no obligations to you
after you are notified that our transferee has assumed our obligations under
this Agreement except those that arose before we assign this Agreement.
11. DEFAULT AND TERMINATION.
-----------------------
11.1 DEFAULT. In addition to the matters identified in Section 3.1, you will
be in default under this Agreement if (a) you do not pay us when a payment is
due, (b) you do not perform any of your other obligations when this Agreement
and the System Standards Manual require, or (c) if you otherwise breach this
Agreement. If your default is not cured within ten days after you receive
written notice from us that you have not filed your monthly report, paid us any
amount that is due or breached your obligations regarding Confidential
Information, or within 30 days after you receive written notice from us of any
other default (except as noted below), then we may terminate this Agreement by
written notice by you, under Section 11.2. We will not exercise our right to
terminate if you have completely cured your default, or until any waiting period
required by law has elapsed. In the case of quality assurance default, if you
have acted diligently to cure the default but cannot do so and have entered into
a written improvement agreement with us within 30 days after the failing
inspection, you may cure the default within 90 days after the failing
inspection. We may terminate the License if you do not perform that improvement
agreement.
11.2 TERMINATION. We may terminate the License, or this Agreement if the
Opening Date has not occurred, effective when we send written notice to you or
such later date as required by law or as stated in the default notice, when (1)
you do not cure a default as provided in Section 11.1 or we are authorized to
terminate under Section 3.1. (2) you discontinue operating the Facility as a
"Ramada", (3) a guarantor on whom we are relying to enter into this Agreement
dies or becomes incapacitated, (4) you lose possession or the right to
possession of the Facility, (5) you (or any guarantor) suffer the termination of
another license or franchise agreement with us or one of our affiliates, (6) you
intentionally maintain false books and records or submit a materially false
report to us, (7) you (or any guarantor) generally fail to pay debts as they
come due in the ordinary
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course of business, (8) you, any guarantor or any of your owners or agents
misstated to us or omitted to tell us a material fact to obtain or maintain this
Agreement with us, (9) you receive two or more notices of default from us in any
one year period (whether or not you cure the defaults), (10) a violation of
Section 9 occurs, or a Transfer occurs before the relicensing process is
completed, (11) you contest in court the ownership or right to franchise or
license all or any part of the System or the validity of any of the Marks, (12)
you, any guarantor or the Facility is subject to any voluntary or involuntary
bankruptcy, liquidation, dissolution, receivership, assignment, reorganization,
moratorium, composition or a similar action or proceeding that is not dismissed
within 60 days after its filing, or (13) you maintain or operate the Facility in
a manner that endangers the health or safety of the Facility's guests.
11.3 CASUALTY AND CONDEMNATION.
11.3.1 You will notify us promptly after the Facility suffers a Casualty that
prevents you from operating in the normal course of business, with less than 75%
of guest rooms available. You will give us information on the availability of
guest rooms and the Facility's ability to honor advance reservations. You will
tell us in writing within 60 days after the Casualty whether or not you will
restore, rebuild and refurbish the Facility to conform to System Standards and
its condition prior to the Casualty. This restoration will be completed within
180 days after the Casualty. You may decide within the 60 days after the
Casualty, and if we do not hear from you, we will assume that you have decided,
to terminate this Agreement, effective as of the date of your notice or 60 days
after the Casualty, whichever comes first. If this Agreement so terminates, you
will pay all amounts accrued prior to termination and follow the post-
termination requirements in Section 13. You will not be obligated to pay
Liquidated Damages if the Facility will no longer be used as an extended stay or
transient lodging facility after the Casualty.
11.3.2 You will notify us in writing within 10 days after you receive notice of
any proposed Condemnation of the Facility, and within 10 days after receiving
notice of the Condemnation date. This Agreement will terminate on the date the
Facility or a substantial portion is conveyed to or taken over by the condemning
authority.
11.4 OUR OTHER REMEDIES. We may suspend the Facility from the Reservation
System for any default or failure to pay or perform under this Agreement,
discontinue Reservation System referrals to the Facility for the duration of
such suspension, and may divert previously made reservations to other Chain
Facilities after giving notice of non-performance, non-payment or default. We
may deduct points under our quality assurance inspection program for your
failure to comply with this Agreement or System Standards.
-15
Reservation service will be restored after you have fully cured any and all
defaults and failures to pay and perform. We may omit the Facility from the
Directory if you are in default on the date we must determine which Chain
Facilities are included in the Directory. You recognize that any use of the
System not in accord with this Agreement will cause us irreparable harm for
which there is no adequate remedy at law, entitling us to injunctive and other
relief. We may litigate to collect amounts due under this Agreement without
first issuing a default or termination notice. Our consent or approval may be
withheld if needed while you are in default under this Agreement or may be
conditioned on the cure of all your defaults.
11.5 YOUR REMEDIES. If we fail to issue our approval or consent as and when
required under this Agreement within a reasonable time of not less than 30 days
after we receive all of the information we request, and you believe our refusal
to approve or consent is wrongful, you may bring a legal action against us to
compel us to issue our approval or consent to the obligation. To the extent
permitted by applicable law, this action shall be your exclusive remedy. We
shall not be responsible for direct, indirect, special, consequential or
exemplary damages, including, but not limited to, lost profits or revenues.
12. LIQUIDATED DAMAGES.
------------------
12.1 GENERALLY. If we terminate the License under Section 11.2, or you
terminate this Agreement (except under Section 11.3 or as a result of our
default which we do not cure within a reasonable time after written notice), you
will pay us within 30 days following the date of termination, as Liquidated
Damages, an amount equal to the sum of accrued Royalties and RINA Services
Assessment Fees during the immediately preceding 24 full calendar months (or the
number of months remaining in the unexpired Term at the date of termination,
whichever is less). If the Facility has been open for less than 24 months, then
the amount shall be the average monthly Royalties and RINA Services Assessment
Fees since the Opening Date multiplied by 24. You will also pay any applicable
Taxes assessed on such payment. Liquidated Damages will not be less than the
product of $2,000.00 multiplied by the number of guest rooms in the Facility.
If we terminate this Agreement under Section 3 before the Opening Date, you will
pay us within 10 days after you receive our notice of termination Liquidated
Damages equal to one-half the amount payable for termination under Section 11.2.
Liquidated Damages are paid in place of our claims for lost future Recurring
Fees under this Agreement. Our right to receive other amounts due under this
Agreement is not affected.
12.2 CONDEMNATION PAYMENTS. In the event a Condemnation is to occur, you will
pay us the fees set forth in Section 7 for a period of one year after we receive
the initial notice of
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condemnation described in Section 11.3.2, or until the Condemnation occurs,
whichever is longer. You will pay us Liquidated Damages equal to the average
daily Royalties and RINA Services Assessment Fees for the one year period
preceding the date of your condemnation notice to us multiplied by the number of
days remaining in the one year notice period if the Condemnation is completed
before the one year notice period expires. This payment will be made within 30
days after Condemnation is completed (when you close the Facility or you deliver
it to the condemning authority). You will pay no Liquidated Damages if the
Condemnation is completed after the one year notice period expires, but the fees
set forth in Section 7 must be paid when due until Condemnation is completed.
13. YOUR DUTIES AT AND AFTER TERMINATION. When the License or this Agreement
------------------------------------
terminates for any reason whatsoever:
13.1 SYSTEM USAGE CEASES. You will immediately stop using the System to
operate and identify the Facility. You will remove all signage and other items
bearing any Marks and follow the other steps detailed in the System Standards
Manual for changing the identification of the Facility. You will promptly paint
over or remove the Facility's distinctive System trade dress, color schemes and
architectural features.
13.2 OTHER DUTIES. You will pay all amounts owed to us under this Agreement
within 10 days after termination. You will owe us Recurring Fees on Gross Room
Revenues accruing while the Facility is identified as a "Ramada", including the
RINA Services Assessment Fees for so long as the Facility receives service from
the Reservation System. We may immediately remove the Facility from the
Reservation System and divert reservations as authorized in Section 11.4. We
may also, to the extent permitted by applicable law, and without prior notice
enter the Facility and any other parcels, remove software (including archive and
back-up copies) for accessing the Reservation System, all copies of the System
Standards Manual, Confidential Information, equipment and all other personal
property of ours, and paint over or remove and purchase for $10.00, all or part
of any interior or exterior Xxxx-bearing signage (or signage face plates),
including billboards, whether or not located at the Facility, that you have not
removed or obliterated within five days after termination. You will promptly
pay or reimburse us for our cost of removing such items, net of the $10.00
purchase price for signage. We will exercise reasonable care in removing or
painting over signage. We will have no obligation or liability to restore the
Facility to its condition prior to removing the signage. We shall have the
right, but not the obligation, to purchase some or all of the Facility's Xxxx-
bearing FF&E and supplies at the lower of their cost or net book value, with the
right to set off their aggregate purchase price against any sums then owed us by
you.
-17-
13.3 ADVANCE RESERVATIONS. The Facility will honor any advance reservations,
including group bookings, made for the Facility prior to termination at the
rates and on the terms established when the reservations are made and pay when
due all related travel agent commissions.
13.4 SURVIVAL OF CERTAIN PROVISIONS. Sections 3.8, 3.9, 3.13, 7, 8, 11.4, 12,
13, 15, 16 and 17 survive termination of the License and this Agreement, whether
termination is initiated by you or us, even if termination is wrongful.
14. YOUR REPRESENTATIONS AND WARRANTIES. You expressly represent and warrant
-----------------------------------
to us as follows:
14.1 QUIET ENJOYMENT AND FINANCING. You own, or will own prior to commencing
improvement, or lease, the Location and the Facility. You will be entitled to
possession of the Location and the Facility during the entire Term without
restrictions that would interfere with your performance under this Agreement,
subject to the reasonable requirements of any financing secured by the Facility.
You have, when you sign this Agreement, and will maintain during the Term,
adequate financial liquidity and financial resources to perform your obligations
under this Agreement.
14.2 THIS TRANSACTION. You have received, at least 10 business days prior to
execution of this Agreement and making any payment to us, our current Uniform
Franchise Offering Circular for prospective licensees. Neither we nor any
person acting on our behalf has made any oral or written representation or
promise to you that is not written in this Agreement on which you are relying to
enter into this Agreement. You release any claim against us or our agents based
on any oral or written representation or promise not stated in this Agreement.
You and the persons signing this Agreement for you have full power and authority
and have been duly authorized, to enter into and perform or cause performance of
your obligations under this Agreement. You have obtained all necessary
approvals of your owners, Board of Directors and lenders. Your execution,
delivery and performance of this Agreement will not violate, create a default
under or breach of any charter, bylaws, agreement or other contract, license,
permit, indebtedness, certificate, order, decree or security instrument to which
you or any of your principal owners is a party or is subject or to which the
Facility is subject. Neither you nor the Facility is the subject of any current
or pending merger, sale, dissolution, receivership, bankruptcy, foreclosure,
reorganization, insolvency, or similar action or proceeding on the date you
execute this Agreement and was not within the three years preceding such date,
except as disclosed in the Application. You will submit to us the documents
about the Facility, you, your owners and your finances that we request in the
License
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Application (or after our review of your initial submissions) before or within
30 days after you sign this Agreement.
14.3 NO MISREPRESENTATIONS OR IMPLIED COVENANTS. All written information you
submit to us about the Facility, you, your owners, any guarantor, or the
finances of any such person or entity, was or will be at the time delivered and
when you sign this Agreement, true, accurate and complete, and such information
contains no misrepresentation of a material fact, and does not omit any material
fact necessary to make the information disclosed not misleading under the
circumstances. There are no express or implied covenants or warranties, oral or
written, between we and you except as expressly stated in this Agreement.
15. PROPRIETARY RIGHTS.
------------------
15.1 MARKS AND SYSTEM. You will not acquire any interest in or right to use
the System or Marks except under this Agreement. You will not apply for
governmental registration of the Marks, or use the Marks or our corporate name
in your legal name, but you may use a Xxxx for an assumed business or trade name
filing.
15.2 INUREMENTS. All present and future distinguishing characteristics,
improvements and additions to or associated with the System by us, you or
others, and all present and future service marks, trademarks, copyrights,
service xxxx and trademark registrations used and to be used as part of the
System, and the associated good will, shall be our property and will inure to
our benefit. No good will shall attach to any secondary designator that you
use.
15.3 OTHER LOCATIONS AND SYSTEMS. We and our affiliates each reserve the right
to own, in whole or in part, and manage, operate, use, lease, finance, sublease,
franchise, license (as licensor or licensee), provide services to or joint
venture (i) distinctive separate lodging or food and beverage marks and other
intellectual property which are not part of the System, and to enter into
separate agreements with you or others (for separate charges) for use of any
such other marks or proprietary rights, (ii) other lodging, food and beverage
facilities, or businesses, under the System utilizing modified System Standards,
and (iii) a Chain Facility at or for any location other than the Location.
There are no territorial rights or agreements between the parties. You
acknowledge that we are affiliated with or in the future may become affiliated
with other lodging providers or franchise systems that operate under names or
marks other than the Marks. We and our affiliates may use or benefit from
common hardware, software, communications equipment and services and
administrative systems for reservations, franchise application procedures or
committees, marketing and advertising programs, personnel, central purchasing,
approved supplier lists, franchise
-19-
sales personnel (or independent franchise sales representatives), etc.
15.4 CONFIDENTIAL INFORMATION. You will take all appropriate actions to
preserve the confidentiality of all Confidential Information. Access to
Confidential Information should be limited to persons who need the Confidential
Information to perform their jobs and are subject to your general policy on
maintaining confidentiality as a condition of employment or who have first
signed a confidentiality agreement. You will not permit copying of Confidential
Information (including, as to computer software, any translation, decompiling,
decoding, modification or other alteration of the source code of such software).
You will use Confidential Information only for the Facility and to perform under
this Agreement. Upon termination (or earlier, as we may request), you shall
return to us all originals and copies of the System Standards Manual, policy
statements and Confidential Information "fixed in any tangible medium of
expression," within the meaning of the U.S. Copyright Act, as amended. Your
obligations under this subsection commence when you sign this Agreement and
continue for trade secrets (including computer software we license to you) as
long as they remain secret and for other Confidential Information, for as long
as we continue to use the information in confidence, even if edited or revised,
plus three years. We will respond promptly and in good faith to your inquiry
about continued protection of any Confidential Information.
15.5 LITIGATION. You will promptly notify us of (i) any adverse or infringing
uses of the Marks (or names or symbols confusingly similar), Confidential
Information or other System intellectual property, and (ii) or any threatened or
pending litigation related to the System against (or naming as a party) you or
us of which you become aware. We alone handle disputes with third parties
concerning use of all or any part of the System. You will cooperate with our
efforts to resolve these disputes. We need not initiate suit against imitators
or infringers who do not have a material adverse impact on the Facility, or any
other suit or proceeding to enforce or protect the System in a matter we do not
believe to be material.
16. RELATIONSHIP OF PARTIES.
-----------------------
16.1 INDEPENDENCE. You are an independent contractor. You are not our legal
representative or agent, and you have no power to obligate us for any purpose
whatsoever. We and you have a business relationship based entirely on and
circumscribed by this Agreement. No partnership, joint venture, agency,
fiduciary or employment relationship is intended or created by reason of this
Agreement. You will exercise full and complete control over and have full
responsibility for your contracts, daily operations, labor relations, employment
practices and policies, including,
-20-
but not limited to, the recruitment, selection, hiring, disciplining, firing,
compensation, work rules and schedules of your employees.
16.2 JOINT STATUS. If you comprise two or more persons or entities
(notwithstanding any agreement, arrangement or understanding between or among
such persons or entities) the rights, privileges and benefits of this Agreement
may only be exercised and enjoyed jointly. The liabilities and responsibilities
under this Agreement will be the joint and several obligations of all such
persons or entities.
16.3 FSH RIGHTS. In the event our rights to (i) any of the Marks or the Ramada
System shall be terminated pursuant to the Master License Agreements (other than
as a result of a purchase option we exercise as set forth therein), or (ii) we
liquidate, dissolve or otherwise cease to do business, then FSH or its assignee
shall have the right to succeed to all of our rights in, to and under this
Agreement and any other agreements between you and us entered into pursuant to
this Agreement, and in such event FSH or its assignee shall be obligated to
perform our duties and assume all of our obligations under any such agreements.
17. LEGAL MATTERS.
-------------
17.1 PARTIAL INVALIDITY. If all or any part of a provision of this Agreement
violates the law of your state (if it applies), such provision or part will not
be given effect. If all or any part of a provision of this Agreement is
declared invalid or unenforceable, for any reason, or is not given effect by
reason of the prior sentence, the remainder of the Agreement shall not be
affected. However, if in our judgment the invalidity or ineffectiveness of such
provision or part substantially impairs the value of this Agreement to us, then
we may at any time terminate this Agreement by written notice to you without
penalty or compensation owed by either party.
17.2 WAIVERS, MODIFICATIONS AND APPROVALS. If we allow you to deviate from
this Agreement, we may insist on strict compliance at any time after written
notice. Our silence or inaction will not be or establish a waiver, consent,
course of dealing, implied modification or estoppel. All modifications,
waivers, approvals and consents of or under this Agreement by us must be in
writing and signed by our authorized representative to be effective.
17.3 NOTICES. Notices will be effective if in writing and delivered by
facsimile transmission with confirmation original sent by first class mail,
postage prepaid, by delivery service, with proof of delivery, or by first class,
prepaid certified or registered mail, return receipt requested, to the
appropriate party at its address stated below or as may be otherwise
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designated by notice. Notices shall be deemed given on the date delivered or
date of attempted delivery, if refused.
Ramada Franchise Systems, Inc.:
Our address: 000 Xxxxxxxxx Xxxx, X.X. Xxx 000,
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000,
Attention: Vice President-Franchise Compliance:
Fax No. (000) 000-0000
Forty Hotels, Inc.:
Your address: 000 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000,
Attention:
Your fax No.:
17.4 REMEDIES. Remedies specified in this Agreement are cumulative and do not
exclude any remedies available at law or in equity. The non-prevailing party
will pay all costs and expenses, including reasonable attorneys' fees, incurred
by the prevailing party to enforce this Agreement or collect amounts owed under
this Agreement. You consent and waive your objection to the non-exclusive
personal jurisdiction of and venue in the New Jersey state courts situated in
Xxxxxx County, New Jersey and the United States District Court for the District
of New Jersey for all cases and controversies under this Agreement or between we
and you.
17.5 MISCELLANEOUS. The Agreement will be governed by and construed under the
laws of the State of New Jersey. The New Jersey Franchise Practices Act will
not apply to any Facility located outside the State of New Jersey. This
Agreement is exclusively for the benefit of the parties. There are no third
party beneficiaries. No agreement between us and anyone else is for your
benefit. The section headings in this Agreement are for convenience of
reference only. We may unilaterally revise Schedule C under this Agreement.
This Agreement, together with the exhibits and schedules attached, is the entire
agreement (superseding all prior representations, agreements and understandings,
oral or written) of the parties about the Facility.
17.6 WAIVER OF JURY TRIAL. THE PARTIES WAIVE THE RIGHT TO A JURY TRIAL IN ANY
ACTION RELATED TO THIS AGREEMENT OR THE RELATIONSHIP BETWEEN THE LICENSOR, THE
LICENSEE, ANY GUARANTOR, AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
18. SPECIAL STIPULATIONS. The following special stipulations apply to this
--------------------
Agreement and supersede any inconsistent or conflicting provisions. These are
personal to you and are not transferable or assignable except to a Permitted
Transferee.
-22-
18.1 LIQUIDATED DAMAGES. Your Liquidated Damages payable within 15 days after
termination of the License prior to expiration of the Term by Us with cause or
by You without cause by either party shall be the product of the aggregate
Royalties and RINA Services Assessment Fees accruing under Section 7.1 (whether
or not paid and excluding travel agent commissions and GDS Fees) during the last
twelve (12) months before termination, multiplied by the "Factor." If
termination occurs during the first License Year, Liquidated Damages shall be
calculated by taking the average of monthly payments of Royalties and RINA
Services Assessment Fees, (whether or not paid and excluding travel agent
commissions and GDS Fees) under this Agreement times twelve (12), then
multiplying by the Factor. If the termination occurs before the end of the
fourth License Year, then the Factor will be five (5). If the termination
occurs during the fifth License Year, the Factor will be four (4). If the
termination occurs during the sixth License Year, the Factor will be three (3).
If the termination occurs after the sixth License Year, the Factor will be two
(2).
18.2 ADDITIONAL TRANSFER RIGHTS. You and any assignee or successor of the
original Licensee may assign this Agreement to, the lessee or transferee of fee
simple title to the Facility upon thirty (30) days prior written notice to us at
any time during the Term when you are not in default under this Agreement
without payment of an application, initial or transfer fee by either you or the
assignee provided that (1) the assignee completes and returns to us at least
fifteen (15) days before the transfer of possession or title, whichever comes
first, our standard license application, (2) the assignee is reasonably
acceptable to us, (3) for a period ending on the seventh anniversary of the date
of execution of this Agreement, the original Licensee remains primarily liable
for the timely and full payment of the Licensee's obligations under this
Agreement for the payment of liquidated damages in accordance with Section 12,
and (4) the assignee assumes this Agreement by writing acceptable to and
directly enforceable by us. From and after said seventh anniversary you shall
have no further liability under this subparagraph.
18.3 CONVERSION RIGHTS. You may terminate the License at any time without
incurring Liquidated Damages or any termination fees, provided that you shall
have entered into a license or franchise agreement with another subsidiary of
HFS Incorporated ("HFS") providing for the operation of the Facility as part of
the franchise system owned by the subsidiary, which agreement shall be in the
then current standard form of license or franchise agreement being offered to
prospective licensees or franchisees by the subsidiary in its then current
Uniform Franchise Offering Circular for New York. Such agreement shall be
modified to include liquidated damages and assignment provisions substantially
the same as Sections 18.1 and 18.2
-23-
above, after giving effect to the expiration of the period prior to such
termination of this Agreement, and a Term at least equal to the unexpired
portion of the original term of this Agreement. You acknowledge that neither
HFS nor any subsidiary of HFS shall be obligated to enter into any license or
franchise agreement with you with respect to the Facility.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first stated above.
WE:
Ramada Franchise Systems, Inc.:
By:____________________________ Attest:______________________________
Vice President Assistant Secretary
YOU, as licensee:
Forte Hotels, Inc.
By:____________________________ Attest:______________________________
(Vice) President
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APPENDIX A
----------
DEFINITIONS
-----------
Agreement means this License Agreement.
---------
Application Fee means the fee you pay when you submit your Application under
---------------
Section 6.
Approved Plans means your plans and specifications for constructing or improving
--------------
the Facility initially or after opening, as approved by us under Section 3.
Casualty means destruction or significant damage to the Facility by act of God
--------
or other event beyond your reasonable anticipation and control.
Chain means the network of Chain Facilities.
-----
Chain Facility means a lodging facility we own, lease, manage, operate or
--------------
authorize another party to operate using the System and identified by the Marks.
Condemnation means the taking of the Facility for public use by a government or
------------
public agency legally authorized to do so, permanently or temporarily, or the
taking of such a substantial portion of the Facility that continued operation in
accordance with the System Standards, or with adequate parking facilities, is
commercially impractical, or if the Facility or a substantial portion is sold to
the condemning authority in lieu of condemnation.
Conference Registration Fee means the fee charged for attendance at the annual
---------------------------
RINA conference.
Confidential Information means any trade secrets we own or protect and other
------------------------
proprietary information not generally known to the lodging industry including
confidential portions of the System Standards Manual or information we otherwise
impart to you and your representatives in confidence. Confidential Information
includes the "Standards of Operation and Design Manual" and all other System
Standards manuals and documentation, including those on the subjects of employee
relations, finance and administration, field operation, purchasing and
marketing, the Reservation System software and applications software.
Declaration means the Declaration of License Agreement you and we sign under
-----------
Section 5.
Design Standards mean standards specified in the System Standards Manual from
----------------
time to time for design, construction, renovation, modification and improvement
of new or existing Chain Facilities,
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including all aspects of facility design, number of rooms, rooms mix and
configuration, construction materials, workmanship, finishes, electrical,
mechanical, structural, plumbing, HVAC, utilities, access, life safety, parking,
systems, landscaping, amenities, interior design and decor and the like for a
Chain Facility.
Directory means the general purpose directory we publish listing the names and
---------
addresses of Chain Facilities, and at our discretion, other Ramada facilities
located outside the United States, Canada and Mexico.
Effective Date means the date on which we and you have executed of this
--------------
Agreement, or the date we insert in the Preamble of this Agreement.
Equity Interests shall include, without limitation, all forms of equity
----------------
ownership of you, including voting stock interests, partnership interests,
limited liability company membership or ownership interests, joint and tenancy
interests, the proprietorship interest, trust beneficiary interests and all
options, warrants, and instruments convertible into such other equity interests.
Equity Transfer means any transaction in which your owners or you sell, assign,
---------------
transfer, convey, pledge, or suffer or permit the transfer or assignment of, any
percentage of your Equity Interests that will result in a change in control of
you to persons other than those disclosed on Schedule B, as in effect prior to
the transaction. Unless there are contractual modifications to your owners'
rights, an Equity Transfer of a corporation or limited liability company occurs
when either majority voting rights or beneficial ownership of more than 50% of
the Equity Interests changes. An Equity Transfer of a partnership occurs when a
newly admitted partner will be the managing, sole or controlling general
partner, directly or indirectly through a change in control of the Equity
Interests of an entity general partner. An Equity Transfer of a trust occurs
when either a new trustee with sole investment power is substituted for an
existing trustee, or a majority of the beneficiaries convey their beneficial
interests to persons other than the beneficiaries existing on the Effective
Date. An Equity Transfer does not occur when the Equity Interest ownership
---
among the owners of Equity Interests on the Effective Date changes without the
admission of new Equity Interest owners. An Equity Transfer occurs when you
merge, consolidate or issue additional Equity Interests in a transaction which
would have the effect of diluting the voting rights or beneficial ownership of
your owners' combined Equity Interests in the surviving entity to less than a
majority.
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Facility means the Location, together with all improvements, buildings, common
--------
areas, structures, appurtenances, facilities, entry/exit rights, parking,
amenities, FF&E and related rights, privileges and properties existing at the
Location on the Effective Date or afterwards.
FF&E means furniture, fixtures and equipment.
----
FF&E Standards means standards specified in the System Standards Manual for FF&E
--------------
and supplies to be utilized in a Chain Facility.
Food and Beverage means any restaurant, catering, bar/lounge, entertainment,
-----------------
room service, retail food or beverage operation, continental breakfast, food or
beverage concessions and similar services offered at the Facility.
Gross Room Revenues means gross revenues attributable to or payable for rentals
-------------------
of guest rooms at the Facility, including all credit transactions, whether or
not collected, but excluding separate charges to guests for Food and Beverage,
room service, telephone charges, key forfeitures and entertainment; vending
machine receipts; and federal, state and local sales, occupancy and use taxes.
Improvement Obligation means your obligation to either (i) renovate and upgrade
----------------------
the Facility, or (ii) construct and complete the Facility, in accordance with
the Approved Plans and System Standards, as described in Section 3.
Indemnitees means us, our direct and indirect parent, subsidiary and sister
-----------
corporations, and the respective officers, directors, shareholders, employees,
agents and contractors, and the successors, assigns, personal representatives,
heirs and legatees of all such persons or entities.
Initial Fee means the fee you are to pay for signing this Agreement as stated in
-----------
Section 6.
License means the non-exclusive license to operate the type of Chain Facility
-------
described in Schedule B only at the Location, using the System and the Xxxx we
designate in Section 1.
License Year means the one-year period beginning on the Opening Date and each
------------
subsequent anniversary of the Opening Date and ending on the day preceding the
next anniversary of the Opening Date.
Liquidated Damages means the amounts payable under Section 12, set by the
------------------
parties because actual damages will be difficult or impossible to ascertain on
the Effective Date and the amount is a reasonable pre-estimate of the damages
that will be incurred and is not a penalty.
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Location means the parcel of land situated at J.F.K. International Airport,
--------
Van Wyck Expressway, Jamaica, New York, as more fully described in Schedule A.
Losses and Expenses means all payments or obligations to make payments either
-------------------
(i) to or for third party claimants by any and all Indemnitees, including guest
refunds, or (ii) incurred by any and all Indemnitees to investigate, respond to
or defend a matter, including without limitation investigation and trial
charges, costs and expenses, attorneys' fees, experts' fees, court costs,
settlement amounts, judgments and costs of collection.
Maintenance Standards means the standards specified from time to time in the
---------------------
System Standards Manual for repair, refurbishment and replacement of FF&E,
finishes, decor, and other capital items and design materials in Chain
Facilities.
Marks means, collectively (i) the service marks associated with the System
-----
published in the System Standards Manual from time to time including, but not
limited to, the name, design and logo for "Ramada" and other marks (U.S. Reg.
Nos. 849,591 and 1,191,422) and (ii) trademarks, trade names, trade dress, logos
and derivations, and associated good will and related intellectual property
interests.
Marks Standards means standards specified in the System Standards Manual for
---------------
interior and exterior Xxxx-bearing signage, advertising materials, china,
linens, utensils, glassware, uniforms, stationery, supplies, and other items,
and the use of such items at the Facility or elsewhere.
Minor Renovation means the repairs, refurbishing, repainting, and other
----------------
redecorating of the interior, exterior, guest rooms, public areas and grounds of
the Facility and replacements of FF&E we may require you to perform under
Section 3.16.
Minor Renovation Ceiling Amount means $3,000.00 per guest room.
-------------------------------
Minor Renovation Notice means the written notice from us to you specifying the
-----------------------
Minor Renovation to be performed and the dates for commencement and completion
given under Section 3.16.
Opening Date means the date on which we authorize you to open the Facility for
------------
business identified by the Marks and using the System.
Operations Standards means standards specified in the System Standards Manual
--------------------
for cleanliness, housekeeping, general maintenance, repairs, concession types,
food and beverage service, vending machines, uniforms, staffing, employee
training,
-28-
guest services, guest comfort and other aspects of lodging operations.
Permitted Transferee means (i) any entity, natural person(s) or trust receiving
--------------------
from the personal representative of an owner any or all of the owner's Equity
Interests upon the death of the owner, if no consideration is paid by the
transferee or (ii) the spouse or adult issue of the transferor, if the Equity
Interest transfer is accomplished without consideration or payment, or (iii) any
natural person or trust receiving an Equity Interest if the transfer is from a
guardian or conservator appointed for an incapacitated or incompetent
transferor.
Punch List means the list of upgrades and improvements attached as part of
----------
Schedule B, which you are required to complete under Section 3.
Recurring Fees means fees paid to us on a periodic basis, including without
--------------
limitation, Royalties, RINA Services Assessment Fees, and other reservation fees
and charges as stated in Section 7.
Relicense Fee means the fee your transferee or you pay to us under Section 7
-------------
when a Transfer occurs.
Reservation System or "Central Reservation System" means the system for offering
------------------
to interested parties, booking and communicating guest room reservations for
Chain Facilities described in Section 4.2.
RINA means the Ramada Inns National Association.
----
RINA Services Assessment Fees means the assessments charged as set forth in
-----------------------------
Section 7.1.2.
Rooms Addition Fee means the fee we charge you for adding guest rooms to the
------------------
Facility.
Royalty means the monthly fee you pay to us for use of the System under Section
-------
7(a). "Royalties" means the aggregate of all amounts owed as a Royalty.
System means the comprehensive system for providing guest lodging facility
------
services under the Marks as we specify which at present includes only the
following: (a) the Marks; (b) other intellectual property, including
Confidential Information, System Standards Manual and know-how; (c) marketing,
advertising, publicity, and other promotional materials and programs; (d) System
Standards; (e) training programs and materials; (f) quality assurance inspection
and scoring programs; and (g) the Reservation System.
-29-
System Standards means the standards for the participating in the System
----------------
published in the System Standards Manual, including but not limited to Design
Standards, FF&E Standards, Marks Standards, Operations Standards, Technology
Standards and Maintenance Standards and any other standards, policies, rules and
procedures we promulgate about System operation and usage.
System Standards Manual means the Standards of Operation and Design Manual and
-----------------------
any other manual we publish or distribute specifying the System Standards.
Taxes means the amounts payable under Section 7.2 of this Agreement.
-----
Technology Standards means standards specified in the System Standards Manual
--------------------
for local and long distance telephone communications services, telephone,
telecopy and other communications systems, point of sale terminals and computer
hardware and software for various applications, including, but not limited to,
front desk, rooms management, records maintenance, marketing data, accounting,
budgeting and interfaces with the Reservation System to be maintained at the
Chain Facilities.
Term means the period of time during which this Agreement shall be in effect, as
----
stated in Section 5.
Termination means a termination of the License under Sections 11.1 or 11.2 or
-----------
your termination of the License or this Agreement.
Transfer means (1) an Equity Transfer, (2) you assign, pledge, transfer,
--------
delegate or grant a security interest in all or any of your rights, benefits and
obligations under this Agreement, as security or otherwise without our consent
as specified in Section 9, (3) you assign (other than as collateral security for
financing the Facility) your leasehold interest in (if any), lease or sublease
all or any part of the Facility to any third party, (4) you engage in the sale,
conveyance, transfer, or donation of your right, title and interest in and to
the Facility, (5) your lender or secured party forecloses on or takes possession
of your interest in the Facility, directly or indirectly, or (6) a receiver or
trustee is appointed for the Facility or your assets, including the Facility. A
Transfer does not occur when you pledge or encumber the Facility to finance its
acquisition or improvement, you refinance it, or you engage in a Permitted
Transferee transaction.
"You" and "Your" means and refers to the party named as licensee identified in
----------------
the first paragraph of this Agreement and its Permitted Transferees.
-30-
"We", "Our" and "Us" means and refers to Ramada Franchise Systems, Inc., a
--------------------
Delaware corporation, its successors and assigns.
-31-
SCHEDULE A
----------
(Legal Description of Facility)
-32-
SCHEDULE B
----------
PART I: YOUR OWNERS:
Name Ownership Percentage Type of Equity Interest
---- -------------------- -----------------------
PART II: THE FACILITY:
Primary designation of Facility: Ramada Plaza Hotel
Number of approved guest rooms: 475
Parking facilities (number of spaces, description): 475
Other amenities, services and facilities: gift shop, meeting rooms,
exercise room
PART III: DESCRIPTION AND SCHEDULE OF RENOVATIONS TO BE COMPLETED AS THE
IMPROVEMENT OBLIGATION:
[PUNCH LIST TO BE ATTACHED.]
-33-
SCHEDULE C
----------
SEPTEMBER 1995
The RINA Services Assessment Fee is equal to 4.5% of Gross Room Revenues.
The airline reservation system charge described in Section 7 is $3.50 per
gross reservation. The travel agent commission described in Section 7 is 10% of
the Gross Room Revenues generated by each reservation originated by the agent
plus our service fee of $0.35 per reservation.
The RINA Services Assessment Fee is subject to change for all Chain
facilities, and new fees and charges may be assessed for new services, but only
upon the recommendation of the Executive Committee of RINA and Our approval.
-00-
XXXXXXX X
-00-
XXXXXXX X-0
[LETTERHEAD OF SKADDEN, ARPS, SLATE, XXXXXXX & XXXX APPEARS HERE]
August 28, 1996
The Chase Manhattan Bank,
as Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of Nova Scotia,
as Syndication Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Banks listed
as Schedule I hereto
Re: Chartwell Leisure Inc.
---------------------
Ladies and Gentlemen:
We have acted as special counsel to HFS Incorporated, a Delaware
corporation ("HFS") in connection with the execution and delivery of (i) the HFS
Guaranty, dated as of the date hereof (the "HFS Guaranty") made by HFS, (ii) the
HFS Subordination Agreement, dated as of the date hereof (the "Subordination
Agreement") between HFS and the Administrative Agent (as defined below), and
acknowledge by the Company (as defined below) and (iii) certain other related
agreements, each of which is delivered under the Credit Agreement, dated as of
the date hereof (the "Credit Agreement"), among Chartwell Leisure Inc. (the
"Company"), Chartwell Canada Corp., (the "Canadian Borrower"), each of the
financial institutions identified on Schedule I hereto (the "Banks"), The Chase
Manhattan Bank, as administrative agent for the Banks (in such capacity the
"Administrative Agent") and The Bank of Nova Scotia, as Syndication Agent
This opinion is being delivered at the request of HFS pursuant to
Section 5.04 of the Credit Agreement. Capitalized terms used herein and not
otherwise defined
The Chase Manhattan Bank, as Administrative Agent
The Bank of Nova Scotia, as Syndication Agent
August 28,1996
Page 2
herein shall have the same meanings herein as ascribed thereto in the Credit
Agreement.
In our examination we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such copies. As to any facts material to this
opinion which we did not independently establish or verify, we have relied upon
statements and representations of HFS and its officers and other representatives
and of public officials, including the facts set forth in the Fact Certificate
described below.
In rendering the opinion set forth herein, we have examined and relied
on originals or copies, certified or otherwise identified to out satisfaction,
of the following:
(a) the HFS Guaranty;
(b) the HFS Subordination Agreement;
(c) the Credit Agreement;
(d) the certificate executed by an officer of HFS dated the date
hereof, a copy of which is attached as Exhibit A hereto (the "Fact
Certificate");
(e) certified copies of the articles or certificate of incorporation
and by-laws of HFS;
(f) certified copies of certain resolutions excerpted from the
minutes for a meeting of the Board of Directors of HFS held on July 24, 1996 and
August 21, 1996, respectively; and
(g) such other documents as we have deemed necessary or appropriate
as a basis for the opinions set forth below.
The Chase Manhattan Bank, as Administrative Agent
The Bank of Nova Scotia, as Syndication Agent
August 28, 1996
Page 3
The documents referred to in clauses (a) and (b) above are referred to
herein as the "Transaction Documents." References to the term (i) "Applicable
Contracts" shall mean those agreements or instruments set forth on Schedule I
to the Fact Certificate and which have been identified to us as all of the
agreements and instruments which are material to the business or financial
condition of HFS, (ii) "Applicable Laws" shall mean the General Corporation Law
of the State of Delaware and those laws, rules and regulations of the State of
New York and of the United States of America (including, without limitation,
Regulations U and X of the Federal Reserve Board) which, in our experience, are
ordinarily applicable to transactions of the type contemplated by the
Transactions Documents and are not the subject of a specific opinion herein
referring expressly to a particular law or laws, (iii) "Governmental Approval"
shall mean any consent, approval, license, authorization or validation of, or
filing, recording or registration with, any Governmental Authority pursuant to
Applicable Laws, (iv) "Governmental Authority" shall mean any executive,
legislative, judicial, administrative or regulatory body under Applicable Laws
and (v) "Applicable Orders" shall mean those orders or decrees of Governmental
Authorities identified on Schedule II to the Fact Certificate.
We express no opinion as to the laws of any jurisdiction other than
(i) the laws of the State of New York, (ii) the General Corporation Law of the
State of Delaware, and (iii) the federal laws of the United States of America to
the extent specifically referred to herein.
The opinions set forth below are subject to the following
qualifications:
(i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws as now or
hereafter in effect affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity
or at law);
The Chase Manhattan Bank, as Administrative Agent
The Bank of Nova Scotia, as Syndication Agent
August 28, 1996
Page 4
(ii) we express no opinion as to the enforceability of any
rights to contribution or indemnification provided for in the Transaction
Documents which are violative of the public policy underlying any law, rule
or regulation (including any federal or state securities law, rule or
regulation);
(iii) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of the Agents or
any party (other than HFS) to the Transaction Documents with any state,
federal or other laws or regulations applicable to it or (ii) except with
respect to Regulations U and X of the Federal Reserve Board as specified
herein, the legal or regulatory status or the nature of the business of the
agents;
(iv) we express no opinion as to any provision of any
Transaction Document which authorizes or permits any purchaser of a
participation interest to set-off or apply any deposit, property or
indebtedness with respect to any participation interest.
Our opinions set forth below are subject to the following additional
assumptions:
(i) the execution, delivery and performance of HFS's obligations under
any of the Transaction Documents to which it is a party do not and will not
conflict with, contravene, violate or constitute a default under (a) any lease,
indenture, instrument or other agreement to which HFS or its property is
subject (other than the Applicable Contracts as to which we express our opinion
in paragraph 4 herein), (b) any rule, law or regulation to which HFS is subject
(other than Applicable Laws as to which we express our opinion in paragraph 5
herein) or (c) any judicial or administrative order or decree of any
governmental authority (other than Applicable Orders as to which we express our
opinion in paragraph 7 herein);
The Chase Manhattan Bank, as Administrative Agent
The Bank of Nova Scotia, as Syndication Agent
August 28, 1996
Page 5
(ii) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other than
Governmental Approvals, as to which we express our opinion in paragraph 6
herein) is required to authorize or is required in connection with the
execution, delivery or performance by HFS of the Transaction Documents to which
it is a party or the transactions contemplated thereby; and
(iii) each of the Transaction Documents constitutes the legal, valid
and binding obligation of each party to such Transaction Document (other than
HFS) enforceable against such party (other than HFS) in accordance with its
terms.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. HFS is validly existing and in good standing under the laws of
the State of Delaware.
2. HFS has the corporate power and corporate authority to execute,
deliver and perform all of its obligations under each of the Transaction
Documents to which it is a party. The execution, delivery and performance by HFS
of each of the Transaction Documents to which it is a party have been duly
authorized by all requisite corporate action on the part of HFS. Each of the
Transaction Documents to which HFS is a party has been duly executed and
delivered by HFS.
3. Each of the Transaction Documents constitutes the valid and
binding obligation of HFS, enforceable against HFS in accordance with its terms.
4. The execution and delivery by HFS of each of the Transaction
Documents to which it is a party and the performance by HFS of its obligations
thereunder, each in accordance with its terms, will not (i) conflict with, or
result in a breach or violation of, any of the provisions of the articles or
certificate of incorpora-
The Chase Manhattan Bank, as Administrative Agent
The Bank of Nova Scotia, as Syndication Agent
August 28, 1996
Page 6
tion or by-laws of HFS, (ii) violate, conflict with or constitute a default
under (with or without notice or lapse of time or both), result in a termination
of, or result in the acceleration of the maturity of any indebtedness issued
under, any Applicable Contracts or (iii) cause the creation of (or the
obligation to create) any security interest or lien upon any of the property of
HFS pursuant to any Applicable Contract. We do not express any opinion, however,
as to whether the execution, delivery or performance by HFS of the Transaction
Documents will constitute a violation of or a default under any covenant,
restriction or provision with respect to financial ratios or tests or any aspect
of the financial condition or results of operations of HFS.
5. Neither the execution, delivery or performance by HFS of the
Transaction Documents to which it is a party nor the compliance by HFS with the
terms and provisions thereof will contravene any provision of any Applicable
Law.
6. No Governmental Approval that has not been obtained or taken and
is not in full force and effect is required to authorize or is required in
connection with the execution, delivery or performance by HFS of the Transaction
Documents to which it is a party.
7. Neither the execution, delivery or performance by HFS of its
obligations under the Transaction Documents nor compliance by HFS with the terms
thereof will contravene any Applicable Order applicable to HFS.
8. No registration of HFS is required under the Investment Company
Act of 1940.
9. HFS is not a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
This opinion is being furnished only to you and is solely for your
benefit and is not to be used, circulated, quoted, relied upon or otherwise
referred to by
The Chase Manhattan Bank, as Administrative Agent
The Bank of Nova Scotia, as Syndication Agent
August 28, 1996
Page 7
any other Person or for any other purpose without our prior written consent,
provided that any Person which becomes a Bank pursuant to Section 14.04 of the
Credit Agreement may rely on this opinion as if it were addressed to such Person
and delivered to such Person on the date hereof.
Very truly yours,
Schedule I
----------
Banks
-----
The Chase Manhattan Bank
The Bank of Nova Scotia
Banque Paribas
Canadian Imperial Bank of Commerce
Mellon Bank, N.A.
NationsBank, N.A.
EXHIBIT A
Fact Certificate
----------------
The undersigned is a duly qualified and acting authorized officer of
HFS Incorporated, a Delaware corporation ("HFS"). I understand that pursuant to
Section 5.04 of that certain Credit Agreement, dated as of August 28, 1996 (the
"Credit Agreement"), among Chartwell Leisure Inc. (formerly National Lodging
Corp.), Chartwell Canada Corp., the lenders named therein, The Chase Manhattan
Bank, as Administrative Agent, and The Band of Nova Scotia, as Syndication
Agent, Skadden, Arps, Slate, Xxxxxxx & Xxxx is rendering an opinion dated August
28, 1996 (the "Opinion"). Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Opinion. I further understand
that Skadden, Arps, Slate, Xxxxxxx & Xxxx is relying on this officer's
certificate and the statements made herein in rendering such Opinion.
With regard to the foregoing, on behalf of HFS I certify that:
1. Set forth on Schedule I hereto are all of agreements or instruments to
which HFS is a party and which are material to the business, financial
condition, operation or properties of HFS (other than the Transaction
Documents).
2. Set forth on Schedule II hereto are all of the orders, judgments and
decrees of any Governmental Authority which are specifically applicable to HFS.
3. Set forth on Schedule III hereto are all consents, approvals,
licenses, authorizations or validations of, or filings, recordings or
registrations with any legislative, judicial, administrative or regulatory
governmental authorities which are required in connection with the execution,
delivery and performance of the Transaction Documents by HFS
4. Less than 20 percent of the assets of HFS on a consolidated basis and
on an unconsolidated basis consists of margin stock (as such term is defined in
Regula-
tion U of the Board of Governors of the Federal Reserve System).
5. HFS (a) is primarily engaged, directly or through a wholly-owned
subsidiary or subsidiaries, in a business or businesses other than that of
investing, reinvesting, owning, holding or trading in securities, (b) is not
engaged and does not propose to engage in the business of issuing face-amount
certificates of the installment type, and has not been engaged in such business
and does not have any such certificate outstanding, and (c) is not engaged and
does not propose to engage in the business of investing, reinvesting, owning,
holding or trading in securities, and does not own or propose to acquire
investment securities, (as defined in Section 3(a) of the Investment Company Act
of 1940, as amended) having a value exceeding 40 percent of the value of such
party's total assets (exclusive of government securities and cash items) on an
unconsolidated basis.
6. HFS does not own or operate facilities used for the generation,
transmission or distribution of electric energy for sale ("electric utility
facilities").
7. HFS does not own or operate facilities used for the distribution at
retail of natural or manufactured gas for heat, light or power ("gas utility
facilities").
8. HFS directly or indirectly, or through one or more intermediary
companies, does not own, control or hold with power to vote (a) 10% or more of
the outstanding securities, such as notes, drafts, stock, treasury stock, bonds,
debentures, certificates of interest or participation in any profit-sharing
agreements or in oil, gas, other mineral royalties or leases, collateral-trust
certificates, preorganization certificates or subscriptions, transferable
shares, investment contracts, voting-trust certificates, certificates of deposit
for a security, receiver's or trustee's certificates or instruments commonly
known as a "security" (including certificates of interest or participation in,
temporary or interim certificates for, receipt for, guaranty of, assumption of
liability on or warrants or rights to subscribe to or purchase any of the
foregoing) presently entitling it to vote in the direction or management of, or
any such instrument issued under or pursuant to any trust, agreement or
arrangement whereby a trustee or trustees or
agent or agents for the owner or holder of such instrument is presently entitled
to vote in the direction or management of, any corporation, partnership,
association, joint-stock company, joint venture or trust that owns or operates
any electric utility facilities or gas utility facilities or (b) any other
interest, directly or indirectly, or through one or more intermediary entities,
in (i) any corporation, partnership association, joint-stock company, joint
venture or trust that owns or operates any electric utility facilities or gas
utility facilities or (ii) any of the foregoing types of entities which have
received notice of the type described in Paragraph 9 below.
9. HFS has not received notice that the Securities and Exchange
Commission has determined, or may determine, that HFS exercises a controlling
influence over the management or direction of the policies of a gas utility
company or any electric utility company as to make it subject to the
obligations, duties and liabilities imposed upon holding companies by the Public
Utility Holding Company Act of 1935, as amended.
IN WITNESS WHEREOF I have executed this certificate this 28th day of
August, 1996.
By:
------------------------------
Name:
Title: Executive Vice President
Schedule I to
Fact Certificate
----------------
APPLICABLE CONTRACTS
--------------------
i. Competitive Advance and Revolving Credit Agreement dated as of December 16,
1993, as amended, among HFS Incorporated, the Lenders referred to therein
and Chemical Bank, as Administrative Agent.
ii. Financing Agreement.
iii. Corporate Services Agreement.
iv. Indentures of HFS, as issuer, relating to (i) the 5 7/8% Senior Notes due
1998, (ii) the 4 1/2% Convertible Senior Notes due 1999 and (iii) 4 3/4%
Convertible Senior Notes due 2003.
v. Ramada License Agreements under which Ramada Franchise Systems, Inc.
franchises "Ramada" and "Ramada Limited" brands in the United States.
Schedule II to
Fact Certificate
----------------
APPLICABLE ORDERS
-----------------
None.
Schedule III to
Fact Certificate
----------------
GOVERNMENTAL APPROVALS
----------------------
None.
EXHIBIT M-2
[Letterhead of Battle Xxxxxx LLP]
August 28, 1996
The Chase Manhattan Bank,
as Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of Nova Scotia,
as Syndication Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Banks listed
on Schedule I hereto
Re: Chartwell Leisure Inc.
----------------------
Ladies and Gentlemen:
We have acted as special counsel to Chartwell Leisure Inc. (formerly known
as National Lodging Corp.), a Delaware corporation (the "Company"), Chartwell
Canada Corp., a Delaware corporation (the "Canadian Borrower"), and the entities
listed on Schedule II hereto (each a "Subsidiary Guarantor," and collectively
the "Subsidiary Guarantors"), in connection with the execution and delivery of
(i) the Credit Agreement, dated as of the date hereof (the "Credit Agreement"),
among the Company, the Canadian Borrower, each of the financial institutions
identified on Schedule I hereto (the "Banks"), The Chase Manhattan Bank, as
administrative agent for the Banks (in such capacity, the "Administrative
Agent") and The Bank of Nova Scotia, as Syndication Agent and (ii) the other
Transaction Documents (as defined below).
This opinion is being delivered at the request of our clients pursuant to
Section 5.04 of the Credit Agreement.
2
Capitalized terms used herein and not otherwise defined herein shall have the
same meanings herein as ascribed thereto in the Credit Agreement. References to
the term "Transaction Parties" shall mean a collective reference to the Company,
the Canadian Borrower and the Subsidiary Guarantors; provided, however, that for
the purposes of the opinions set forth in paragraphs 1 and 2 below, references
to "Subsidiary Guarantors" shall not include, and we render no opinion as to,
Travel Beverages, Inc., a Texas corporation ("Travel Beverages"), or NL/San
Diego Inc., a California corporation ("NL/San Diego").
In our examination we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, and the authenticity of the
originals of such copies. As to any facts material to this opinion, we have
relied upon statements and representations of the Transaction Parties and their
respective officers and other representatives and of public officials, including
the facts set forth in the Fact Certificate described below.
In rendering the opinions set forth herein, we have examined and relied on
originals or copies, certified or otherwise identified to our satisfaction, of
the following:
(a) the Credit Agreement;
(b) the Revolving $ Notes of the Company dated the date hereof and
payable to the order of each of the Banks;
(c) the Swingline Note of the Company dated the date hereof and
payable to the order of The Chase Manhattan Bank;
(d) The Revolving C$ Notes of the Canadian Borrower dated the date
hereof and payable to the order of each of the Banks;
(e) the Pledge Agreement, dated as of the date hereof (the "Pledge
Agreement"), made by the Company, the Canadian Borrower and the other Pledgors
identified therein to The Chase Manhattan Bank, as Collateral Agent (the
"Collateral Agent");
(f) the Subsidiaries Guaranty, dated as of the date hereof (the
"Subsidiaries Guaranty" and, together with the Company Guaranty referred to
below, the "Guarantees"), made by each of the Subsidiary Guarantors and the
other guarantors identified therein;
(g) the Chartwell Leisure Inc. Guaranty, dated as of the date hereof
(the "Company Guaranty"), made by the Company;
3
(h) the HFS Subordination Agreement, dated as of the date hereof (the
"Subordination Agreement"), between HFS and the Administrative Agent, and
acknowledged and agreed to by the Company;
(i) the certificate executed by an officer of each Transaction Party
dated the date hereof, a copy of which is attached as Exhibit A hereto (the
"Fact Certificate");
(j) copies of the articles or certificate of incorporation of each
Transaction Party certified as of a recent date by the Secretary of State of
respective jurisdiction in which each Transaction Party is organized and
certified copies of the by-laws of each Transaction Party;
(k) certified copies of certain resolutions of the Board of Directors
of each of the Company, the Canadian Borrower and each of the Subsidiary
Guarantors (other than Travel Beverages and NL/San Diego) which were adopted on
August 27, 1996; and
(l) a good standing certificate dated as of a recent date for each
Transaction Party issued by the Secretary of State of respective jurisdiction in
which each Transaction Party is organized.
(m) such other documents as we have deemed necessary or appropriate as
a basis for the opinions set forth below.
The documents referred to in clauses (a) through (g) above are
referred to herein as the "Transaction Documents." As used herein, the term
"UCC" means the Uniform Commercial Code as in effect on the date hereof in the
State of New York. In addition, references to the term (i) "Applicable
Contracts" shall mean those agreements or instruments set forth on Schedule II
to the Fact Certificate and which have been identified to us as all of the
agreements and instruments which are material to the business or financial
condition of the Transaction Parties, (ii) "Applicable Laws" shall mean the
General Corporation Law of the State of Delaware and those laws, rules and
regulations of the State of New York and of the United States of America
(including, without limitation, Regulations U and X of the Federal Reserve
Board) which, in our experience, are ordinarily applicable to transactions of
the type contemplated by the Transaction Documents and are not the subject of a
specific opinion herein referring expressly to a particular law or laws, (iii)
"Governmental Approval" shall mean any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any Governmental
Authority pursuant to Applicable Laws, (iv) "Governmental Authority" shall mean
any executive, legislative, judicial, administrative or regulatory body under
Applicable Laws and (v) "Applicable Orders"
4
shall mean those orders or decrees of Governmental Authorities identified on
Schedule III to the Fact Certificate.
We do not express any opinion as to the laws of states or
jurisdictions other than the laws of the State of New York, the federal law of
the United States and the General Corporation Law and Revised Uniform Limited
Partnership Act of the State of Delaware. No opinion is expressed as to the
effect that the law of any other jurisdiction might have upon the subject matter
of the opinions expressed herein under conflicts of laws principles or
otherwise. We express no opinion as to any county, municipal, city, town or
village ordinance, rule or regulation. Other than as explicitly set forth in
paragraph 10 below, we render no opinion as to federal or state securities laws.
Except for the opinions expressly set forth in the numbered paragraphs
below, we express no opinions and no opinions should be implied. We express no
opinion as to environmental laws, antitrust laws or the law of fiduciary duty.
Our opinions are limited in all respects to laws and facts existing on the date
hereof. By rendering our opinions herein, we do not undertake to advise you of
any changes in such laws or facts which may occur after the date hereof.
To the extent that our opinions expressed in paragraph 3 below is
related to the enforceability of the choice of law provisions contained in the
Closing Documents, such opinions are based upon our reading of the provisions of
Section 5-1401 of the General Obligations Law of the State of New York. While
we have found few reported cases construing such statutory provisions and
consequently cannot opine with certainty as to the conclusion a court would
reach, we believe that a New York court applying such statutory provisions to
those Transaction Documents choosing New York law as the governing law should
give effect to the choice of law provisions set forth therein. We note,
however, the Section 5-1401 of the General Obligations Law of the State of New
York states that it shall not apply to (and we render no opinion with respect
to) choice of law provisions contained in any contract, agreement or undertaking
(a) for labor or personal services, (b) relating to any transaction for
personal, family or household services, or (c) to the extent provided to the
contrary in subsection two of section 1-105 of the UCC.
The opinions set forth below are subject to the following
qualifications:
(i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws as now or
hereafter in effect affecting creditors' rights generally and by general
principles of equity
5
(regardless of whether enforcement is sought in equity or at law);
(ii) certain of the remedial provisions with respect to the
security, including waivers which respect to the exercise of remedies
against the collateral contained in each of the Pledge Agreement and the
Guarantees, may be unenforceable in whole or in part, but the inclusion of
such provisions does not affect the validity of the Pledge Agreement and
each of the Guarantees, each taken as a whole, and the Pledge Agreement and
each of the Guarantees, each taken as a whole, together with applicable
law, contain, subject to the other qualifications set forth herein,
adequate provisions for the practical realization of the benefits of the
security created thereby;
(iii) we express no opinion as to the enforceability of any
rights to contribution or indemnification provided for in the Transaction
Documents which are violative of the public policy underlying any law, rule
or regulation (including any federal or state securities law, rule or
regulation);
(iv) we express no opinion as to any provision with respect to
governing law to the extent that it purports to affect the choice of law
governing perfection and the effect of perfection and non-perfection of the
security interests;
(v) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of the Agents or
any party (other than a Transaction Party) to the Transaction Documents
with any state, federal or other laws or regulations applicable to it or
(ii) except with respect to Regulations U and X of the Federal Reserve
Board as specified herein, the legal or regulatory status or the nature of
the business of the Agents;
(vi) we express no opinion as to the applicability or effect of
any fraudulent transfer or similar law on the Transaction Documents or any
transactions contemplated thereby; and
(vii) we express no opinion as to any provision of any
Transaction Document which authorizes or permits any purchaser of a
participation interest to set-off or apply any deposit, property or
indebtedness with respect to any participation interest.
Our opinions set forth below are subject to the following additional
assumptions:
6
(i) the execution, delivery and performance of each Transaction
Party's obligations under any of the Transaction Documents to which it is a
party do not and will not conflict with, contravene, violate or constitute
a default under (a) any lease, indenture, instrument or other agreement to
which such Transaction Party or its property is subject (other than the
Applicable Contracts as to which we express our opinion in paragraph 4
herein), (b) any rule, law or regulation to which such Transaction Party is
subject (other than Applicable Laws as to which we express our opinion in
paragraph 5 herein) or (c) any judicial or administrative order or decree
of any governmental authority (other than Applicable Orders as to which we
express our opinion in paragraph 7 herein);
(ii) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other
than Governmental Approvals, as to which we express our opinion in
paragraph 6 herein) is required to authorize or is required in connection
with the execution, delivery or performance by each Transaction Party of
the Transaction Documents to which it is a party or the transactions
contemplated thereby;
(iii) each of the Transaction Documents constitutes the legal,
valid and binding obligation of each party to such Transaction Document
(other than the Transaction Parties) enforceable against such party (other
than the Transaction Parties) in accordance with its terms;
(iv) (a) each of the Transaction Documents has been duly executed
or acknowledged and delivered by each of the parties thereto (other than
the Transaction Parties), (b) each party to the Transaction Documents
(other than the Transaction Parties) has full power, authority and legal
right, under its charter and other governing documents, corporate and
regulatory legislation and the laws of its jurisdiction of incorporation or
organization, to execute and deliver the Transaction Documents to which it
is a party and to carry out the transac tions contemplated thereunder, and
(c) each party to the Transaction Documents (other than the Transaction
Parties) has complied with any state or federal laws and regulations which
may be applicable to such party with regard to any aspect of the
transactions contemplated by the Transaction Documents; and
(v) each of Travel Beverages and NL/San Diego has the corporate
power and corporate authority to execute, deliver and perform all of its
obligations under each of the Transaction Documents to which it is a party.
The execution, delivery and performance by each of Travel Beverages and
NL/San Diego of each of the Transaction Documents to which it is a
7
party have been duly authorized by all requisite corporate action on the
part of Travel Beverages and NL/San Diego, respectively. Each of the
Transaction Documents to which Travel Beverages and NL/San Diego is a party
has been duly executed and delivered by Travel Beverages and NL/San Diego,
respectively.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Each of the Transaction Parties is validly existing and in good
standing under the laws of the State of Delaware.
2. Each of the Transaction Parties has the corporate power and
corporate authority to execute, deliver and perform all of its obligations under
each of the Transaction Documents to which it is a party. The execution,
delivery and performance by each of the Transaction Parties of each of the
Transaction Documents to which it is a party have been duly authorized by all
requisite corporate action on the part of each of the Transaction Parties. Each
of the Transaction Documents to which each of the Transaction Parties is a party
has been duly executed and delivered by each such Transaction Party.
3. Each of the Transaction Documents constitutes the valid and
binding obligation of each Transaction Party which is a party thereto,
enforceable against each such Transaction Party in accordance with its terms.
4. The execution and delivery by each Transaction Party of each of
the Transaction Documents to which it is a party and the performance by each
Transaction Party of its obligations thereunder, each in accordance with its
terms, will not (i) conflict with, or result in a breach or violation of, any of
the provisions of the articles or certificate of incorporation or by-laws of
such Transaction Party, (ii) violate, conflict with or constitute a default
under (with or without notice or lapse of time or both), result in a termination
of, or result in the acceleration of the maturity of any indebtedness issued
under, any Applicable Contracts or (iii) cause the creation of (or the
obligation to create) any security interest or lien (other than the liens
granted under or created by the Pledge Agreement) upon any of the property of
such Transaction Party pursuant to any Applicable Contract. We do not express
any opinion, however, as to whether the execution, delivery or performance by
any Transaction Party of the Transaction Documents to which it is a party will
constitute a violation of or a default under any covenant, restriction or
provision with respect to financial ratios or tests or any aspect of the
financial condition or results of operations of such Transaction Party.
8
5. Neither the execution, delivery or performance by each
Transaction Party of the Transaction Documents to which it is a party nor the
compliance by each Transaction Party with the terms and provisions thereof will
contravene any provision of any Applicable Law on the part of any Transaction
Party.
6. No Governmental Approval that has not been obtained or taken and
is not in full force and effect is required to authorize or is required in
connection with the execution, delivery or performance by each Transaction Party
of the Transaction Documents to which it is a party, except (a) the filings and
recordings necessary to release or terminate Liens securing indebtedness of the
Transaction Parties which is repaid on the date hereof and (b) the filings and
recordings necessary to evidence the liens created by the Pledge Agreement.
7. Neither the execution, delivery or performance by any Transaction
Party of its obligations under the Transaction Documents to which it is a party
nor compliance by each Transaction Party with the terms thereof will contravene
any Applicable Order applicable to such Transaction Party.
8. The delivery to the Collateral Agent in the State of New York of
the certificates identified in Annex A to the Pledge Agreement (the "Pledged
Certificates"), together with the Pledge Agreement, is effective to create in
favor of the Collateral Agent for the benefit of the Secured Creditors (as
defined in the Pledge Agreement) a valid and perfected security interest in the
Pledged Certificates and the proceeds thereof to secure the Secured Obligations
(as defined in the Pledge Agreement). No interest of any other creditor of any
Transaction Party is equal or prior to the security interest of the Collateral
Agent for the benefit of the Secured Creditors in the Pledged Certificates or
the proceeds thereof.
Our opinion in paragraph 8 is subject to the following assumptions and
qualifications:
(i) we have assumed that the Transaction Parties have sufficient
rights in the Pledged Certificates for the security interest of the
Collateral Agent for the benefit of the Secured Creditors to attach, and we
express no opinion as to the nature or extent of the Transaction Parties'
rights in, or title to, any of the Pledged Certificates;
(ii) our security interest opinions are limited to Articles 8 and
9 of the UCC, and therefore such opinions do not address (a) laws of
jurisdictions other than New York, and of New York except for Articles 8
and 9 of the UCC, (b) collateral of a type not subject to Articles 8 and 9
of the UCC, and (c)
9
under Section 9-103 of the UCC, what law governs perfection of the security
interests granted in the collateral covered by this opinion;
(iii) we call to your attention that under the UCC, events
occurring subsequent to the date hereof may affect any security interest
subject to the UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-316 with
respect to changes in the location of the collateral; Section 9-316 with
respect to subordination agreements; Section 9-403 with respect to
continuation statements; and Sections 9-307, 9-308 and 9-309 with respect
to subsequent purchasers of the collateral. In addition, actions taken by
a secured party (e.g., releasing or assigning the security interest,
delivering possession of the collateral to the debtor or another person and
voluntarily subordinating a security interest) may affect the validity,
perfection or priority of a security interest;
(iv) we call to your attention that in the case of the issuance
of distributions on, or proceeds of, the Pledged Certificates, the security
interests of the secured party therein will be perfected only if possession
thereof is obtained or other appropriate action is taken in accordance with
the provisions of the UCC or other applicable law and, in the case of
certain types of distributions or proceeds, other parties such as holders
in due course, bona fide purchasers and buyers in the ordinary course of
business may obtain superior priority;
(v) we have assumed that each of the Collateral Agent and the
Secured Creditors acquired its interest in the Pledged Certificates for
value and in good faith and that neither the Collateral Agent nor any of
the Secured Creditors has notice prior to or on the date hereof of an
adverse claim with respect to the Pledged Certificates;
(vi) we express no opinion with respect to (a) the priority of
the security interests of the Collateral Agent in the Pledged Certificates
against a lien creditor (as such term is defined in Section 9-301(3) of the
UCC) with respect to future advances to the extent set forth in Section 9-
301(4) of the UCC, (b) section 552 of title 112 of the Bankruptcy Code with
respect to any collateral acquired by any Pledgor or any guarantor
subsequent to the commencement of a case against the Pledgor or any
guarantor and (c) the perfection of security interests in property intended
to be collateral where the filing of financing statements, recording,
possession or other action is required in any jurisdiction other than the
State of New York;
10
(vii) with respect to any Pledged Certificates in the possession
of the Collateral Agent, (a) if such Pledged Certificates are further
transferred or possession is relinquished or (b) such Pledged Certificates
are removed from the State of New York, the Collateral Agent's security
interest therein may be deemed or become unperfected or otherwise limited;
(viii) we call to your attention that the issuers of certain of
the Pledged Certificates are organized under the laws of various
jurisdictions other than the United States of America, and we express no
opinion as to the effect of the laws of such jurisdictions on the opinions
herein stated. Our opinion with respect to the security interest of the
Collateral Agent in the Pledged Certificates is limited to the UCC, and the
laws of the jurisdiction of the issuer of the securities may affect, among
other things, whether the security is characterized as a certificated
security, the exercise of remedies with respect to such security and the
exercise of voting or other rights with respect to such security.
9. The provisions of the Pledge Agreement are effective to create,
in favor of the Collateral Agent for the benefit of the Secured Creditors to
secure the Credit Document Obligations, a valid security interest in the
Transaction Parties' rights in the partnership interests identified in Annex C
to the Pledge Agreement (the "Pledged Partnership Interests").
Our opinion in paragraph 9 is subject to the following assumptions and
qualifications:
(i) we have assumed that the Pledged Partnership Interests exist
and that the Transaction Parties have sufficient rights in the Pledged
Partnership Interests for the security interest of the Collateral Agent to
attach, and we express no opinion as to the nature or extent of the
Transaction Parties' rights in, or title to, any of the Pledged Partnership
Interests;
(ii) our security interest opinions are limited to Article 9 of
the UCC, and therefore such opinions do not address (a) laws of
jurisdictions other than New York, and of New York except for Article 9 of
the UCC, and (b) collateral of a type not subject to Article 9 of the UCC;
(iii) we call to your attention that under the UCC, events
occurring subsequent to the date hereof may affect any security interest
subject to the UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-402 with
respect to changes in
11
name, structure and corporate identity of the debtor; Section 9-103 with
respect to the location of the debtor; Section 9-316 with respect to
subordination agreements; Section 9-403 with respect to continuation
statements; and Sections 9-307, 9-308 and 9-309 with respect to subsequent
purchasers of the collateral. In addition, actions taken by a secured
party (e.g., releasing or assigning the security interest, delivering
possession of the collateral to the debtor or another person and
voluntarily subordinating a security interest) may affect the validity,
perfection or priority of a security interest;
(iv) (a) we express no opinion with respect to the perfection or
priority of the security interest of the Collateral Agent in any of the
Pledged Partnership Interests and (b) we express no opinion as to section
552 of title 112 of the Bankruptcy Code with respect to any collateral
acquired by any Pledgor or any guarantor subsequent to the commencement of
a case against the Pledgor or any guarantor;
(v) we call to your attention that enforcement of the security
interest of the Collateral Agent may be subject to the terms of any of the
agreements creating the Pledged Partnership Interests and claims and
defenses of any of the parties to such agreements; and
(vi) in the case of any Pledged Partnership Interest which is
itself secured by other property, we express no opinion with respect to the
Collateral Agent's rights in and to such underlying property.
10. No registration of any Transaction Party is required under the
Investment Company Act of 1940.
11. No Transaction Party is a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
This opinion is being furnished only to you and is solely for your
benefit and is not to be used, circulated, quoted, relied upon or otherwise
referred to by any other Person or for any other purpose without our prior
written consent, provided that any Person which becomes a Bank pursuant to
Section 14.04 of the Credit Agreement may rely on this opinion as if it were
addressed to such Person and delivered to such Person on the date hereof.
Very truly yours,
BATTLE XXXXXX LLP
Schedule I
----------
Banks
-----
The Chase Manhattan Bank
The Bank of Nova Scotia
Banque Paribas
Canadian Imperial Bank of Commerce
Mellon Bank, N.A.
Nationsbank, N.A.
Schedule II
-----------
Subsidiary Guarantors
---------------------
Keystone Pittsburgh Gaming, Inc., a Delaware corporation
Keystone Erie Gaming, Inc., a Delaware corporation
National Gaming Mississippi, Inc., a Delaware corporation
Chartwell Mexico Corp., a Delaware corporation
Chartwell Lodging Inc., a Delaware corporation
Chartwell Canada Corp., a Delaware corporation
Bear Financial Corp., a Delaware corporation
NL Texas Inc., a Delaware corporation
Chartwell Brunswick Corp., a Delaware corporation
Chartwell Santa Fe Corp., a Delaware corporation
Chartwell Albuquerque Corp., a Delaware corporation
Chartwell Nashville Corp., a Delaware corporation
National Lodging Corp., a Delaware corporation
NL/San Diego Inc., a California corporation
Travel Beverages, Inc., a Texas corporation
Fact Certificate
----------------
The undersigned is a duly qualified and acting authorized officer of
each of the Transaction Parties listed on Schedule I hereto. I understand that
pursuant to Section 5.04 of that certain Credit Agreement, dated as of August
28, 1996 (the "Credit Agreement"), among Chartwell Leisure Inc. (formerly
National Lodging Corp.), Chartwell Canada Corp., the lenders named therein, The
Chase Manhattan Bank, as Administrative Agent, and The Bank of Nova Scotia, as
Syndication Agent, Battle Xxxxxx LLP is rendering an opinion dated August 28,
1996 (the "Opinion"). Capitalized terms used herein but not otherwise defined
shall have the meanings set forth in the Opinion. I further understand that
Battle Xxxxxx LLP is relying on this officer's certificate and the statements
made herein in rendering such Opinion.
With regard to the foregoing, on behalf of the Transaction Parties I
certify that:
1. The chief executive office for Chartwell Leisure Inc. is 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
2. Set forth on Schedule II hereto are all of the agreements or
instruments to which any Transaction Party is a party and which are material to
the business, financial condition, operation or properties of the Transaction
Parties (other than the Transaction Documents and agreements creating,
evidencing or organizing the Joint Ventures).
3. Set forth on Schedule III hereto are all of the orders, judgments and
decrees of any Governmental Authority which are specifically applicable to the
Transaction Parties.
4. Set forth on Schedule IV hereto are all consents, approvals, licenses,
authorizations or validations of, or filings, recordings or registrations with
any legislative, judicial, administrative or regulatory governmental authorities
which are required in connection with the execution, delivery and performance of
the Transaction Documents by any of the Transaction Parties, except the filings
and recordings necessary to release or terminate Liens securing indebtedness of
the Transaction Parties which is repaid on the date hereof.
5. None of the partnership interests of any Transaction Party identified
in Annex C to the Pledge Agreement are evidenced by a certificate.
6. Less than 20 percent of the value of the assets of the Transaction
Parties on either a consolidated basis or on an unconsolidated basis consists of
margin stock (as such term is defined in Regulation U of the Board of Governors
of the Federal Reserve System).
7. Each of the Transaction Parties (a) is primarily engaged, directly or
through a wholly-owned subsidiary or subsidiaries, in a business or businesses
other than that of investing, reinvesting, owning, holding or trading in
securities, (b) is not engaged and does not propose to engage in the business of
issuing face-amount certificates of the installment type, and has not been
engaged in such business and does not have any certificate outstanding, and (c)
is not engaged and does not propose to engage in the business of investing,
reinvesting, owning, holding or trading in securities, and does not own or
propose to acquire investment securities (as defined in Section 3(a) of the
Investment Company Act of 1940, as amended) having a value exceeding 40 percent
of the value of such party's total assets (exclusive of government securities
and cash items) on an unconsolidated basis.
8. None of the Transaction Parties owns or operates facilities used for
the generation, transmission or distribution of electric energy for sale
("electric utility facilities").
9. None of the Transaction Parties owns or operates facilities used for
the distribution at retail of natural or manufactured gas for heat, light or
power ("gas utility facilities").
10. None of the Transaction Parties directly or indirectly, or through one
or more intermediary companies, owns, controls or holds with power to vote (a)
10% or more of the outstanding securities, such as notes, drafts, stock,
treasury stock, bonds, debentures, certificates of interest or participation in
any profit-sharing agreements or in oil, gas, other mineral royalties or leases,
collateral-trust certificates, preorganization certificates or subscriptions,
transferable shares, investment contracts, voting-trust certificates,
certificates of deposit for a security, receiver's or trustee's certificates or
instruments commonly known as a "security" (including certificates of interest
or participation in, temporary or interim certificates for, receipt for,
guaranty of, assumption of liability on or warrants or rights to subscribe to or
purchase any of the foregoing) presently entitling it to vote in the direction
or management of, or any such instrument issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such instrument is presently entitled to vote in the
direction or management of, any corporation, partnership, association, joint-
stock company, joint venture or trust that owns or operates any electric utility
facilities or gas utility facilities or (b) any other interest, directly or
indirectly, or through one or more
intermediary entities, in (i) any corporation, partnership association, joint-
stock company, joint venture or trust that owns or operates any electric utility
facilities or gas utility facilities or (ii) any of the foregoing types of
entities which have received notice of the type described in Paragraph 11 below.
11. None of the Transaction Parties has received notice that the
Securities and Exchange Commission has determined, or may determine, that any of
the Transaction Parties exercises a controlling influence over the management or
direction of the policies of a gas utility company or any electric utility
company as to make it subject to the obligations, duties and liabilities imposed
upon holding companies by the Public Utility Holding Company Act of 1935, as
amended.
12. Battle Xxxxxx may rely on the Officer's Certificate delivered by the
Company to the Administrative Agent pursuant to Section 5.02 of the Credit
Agreement as if such certificate were delivered to Battle Xxxxxx on the date
hereof.
IN WITNESS WHEREOF I have executed this certificate this 28th of
August, 1996.
By: ____________________________
Name:
Schedule I to
Fact Certificate
----------------
Transaction Parties
-------------------
Chartwell Leisure Inc., a Delaware corporation
Keystone Pittsburgh Gaming, Inc., a Delaware corporation
Keystone Erie Gaming, Inc., a Delaware corporation
National Gaming Mississippi, Inc., a Delaware corporation
Chartwell Mexico Corp., a Delaware corporation
Chartwell Lodging Inc., a Delaware corporation
Chartwell Canada Corp., a Delaware corporation
Bear Financial Corp., a Delaware corporation
NL Texas Inc., a Delaware corporation
Chartwell Brunswick Corp., a Delaware corporation
Chartwell Santa Fe Corp., a Delaware corporation
Chartwell Albuquerque Corp., a Delaware corporation
Chartwell Nashville Corp., a Delaware corporation
Nation Lodging Corp., a Delaware corporation
Chartwell San Diego, a Delaware corporation
Schedule II to
Fact Certificate
----------------
APPLICABLE CONTRACTS
--------------------
1. Stock Purchase Agreement between National Gaming Corporation and Forte USA,
Inc. dated as of December 19, 1995.
2. Financing Agreement.
3. Corporate Services Agreement.
4. License Agreement, dated as of January 23, 1996 between Bear Acquisition
Corp. and Forte Hotels, Inc.
5. Canadian Acquisition Documents.
7. Chartwell Stock Purchase Agreement
Schedule III to
Fact Certificate
----------------
APPLICABLE ORDERS
-----------------
None.
Schedule IV to
Fact Certificate
----------------
GOVERNMENTAL APPROVALS
----------------------
None.
EXHIBIT M-3
-----------
[FORM OF OPINION OF IN-HOUSE COUNSEL TO THE BORROWERS]
August 28, 1996
The Chase Manhattan Bank,
as Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of Nova Scotia,
as Syndication Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Banks listed
on Schedule I hereto
Re: Chartwell Leisure Inc./Credit Facility
--------------------------------------
Ladies and Gentlemen:
I am Vice President, General Counsel of Chartwell Leisure Inc.
(formerly known as National Lodging Corp.), a Delaware corporation (the
"Company"). In that capacity, I have been asked to render the following
opinions pursuant to Section 5.04 of the Credit Agreement, dated as of the date
hereof (the "Credit Agreement"), among the Company, the Chartwell Canada Corp.,
a Delaware corporation, each of the financial institutions identified on
Schedule I hereto (the "Banks"), The Chase Manhattan Bank, as administrative
agent for the Banks (in such capacity, the "Administrative Agent") and The Bank
of Nova Scotia, as Syndication Agent, in connection with the execution and
delivery of (i) the Credit Agreement and (ii) certain other related agreements.
Capitalized terms used herein and not otherwise defined herein shall
have the same meanings herein as ascribed thereto in the Credit Agreement.
In my examination I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of the originals of such copies. As to any facts material to this
opinion which I did not independently establish or verify, I have relied upon
statements and representations of the Company and its subsidiaries and their
respective officers and other
representatives and of public officials, including the facts set forth in the
Fact Certificate described below.
In rendering the opinions set forth herein, I have examined and relied
on originals or copies, certified or otherwise identified to my satisfaction, of
the following:
(a) the Credit Agreement;
(b) the Pledge Agreement, dated as of the date hereof (the "Pledge
Agreement"), made by each of the Company, the Canadian Borrower and the
Subsidiary Guarantors to The Chase Manhattan Bank, as Collateral Agent (the
"Collateral Agent");
(c) the Subsidiaries Guaranty, dated as of the date hereof (the
"Subsidiaries Guaranty" and, together with the Company Guaranty referred to
below, the "Guarantees"), made by each of the Subsidiary Guarantors identified
therein;
(d) the certificate executed by an officer of Chartwell Lodging dated
the date hereof, a copy of which is attached as Exhibit A hereto (the "Fact
Certificate");
(e) certified copies of the articles or certificate of incorporation
and by-laws of NL/San Diego Inc., a California corporation ("NL/San Diego");
(f) certified copies of certain resolutions of the Board of Directors
of each of NL/San Diego which were adopted on August [ ], 1996;
(g) an unfiled, but signed copy of a financing statement naming
Chartwell Lodging as debtor and The Chase Manhattan Bank, as Collateral Agent as
secured party, which we understand will be filed within ten (10) days of the
transfer of the security interest under the Pledge Agreement in the office of
the Secretary of State of the State of California (such filing office, the
"Filing Office" and such financing statement, the "Financing Statement"); and
(h) such other documents as we have deemed necessary or appropriate
as a basis for the opinions set forth below.
The documents referred to in clauses (a) through (c) above are
referred to herein as the "Transaction Documents." Unless otherwise indicated,
references to the "UCC" shall mean with respect to the perfection and the effect
of perfection or non-perfection of the security interest in the Pledged
Partnership Interests (as defined herein), the Uniform Commercial Code as in
effect on the date hereof in the State of California.
I am admitted to practice law in the State of California and express
no opinion as to the laws of any jurisdiction other than the laws of the State
of California.
The opinions set forth below are subject to the following
qualifications:
(i) certain of the remedial provisions with respect to the
security, including waivers which respect to the exercise of remedies
against the collateral
contained in the Pledge Agreement, may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the validity of
the Pledge Agreement, each taken as a whole, and the Pledge Agreement,
taken as a whole, together with applicable law, contains, subject to the
other qualifications set forth herein, adequate provisions for the
practical realization of the benefits of the security created thereby;
(ii) I express no opinion as to any provision with respect to
governing law to the extent that it purports to affect the choice of law
governing perfection and the effect of perfection and non-perfection of the
security interests;
My opinions set forth below are subject to the following additional
assumption that each of the Transaction Documents constitutes the legal, valid
and binding obligation of each party to such Transaction Document enforceable
against such party in accordance with its terms.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. NL/San Diego is validly existing and in good standing under the
laws of the State of California.
2. NL/San Diego has the corporate power and corporate authority to
execute, deliver and perform all of its obligations under each of the
Transaction Documents to which it is a party. The execution, delivery and
performance by NL/San Diego of each of the Transaction Documents to which it is
a party have been duly authorized by all requisite corporate action on the part
of NL/San Diego. Each of the Transaction Documents to which NL/San Diego is a
party has been duly executed and delivered by NL/San Diego.
3. The Financing Statement is in appropriate form for filing in the
Filing Office under the UCC. The security interest in favor of the Collateral
Agent for the benefit of the Secured Creditors in that portion of the in the
partnership interests identified in Annex C to the Pledge Agreement (the
"Pledged
Partnership Interests") which is described in the Financing Statement will be
perfected upon the filing of the Financing Statement in the Filing Office.
My opinion in paragraph 3 is subject to the following assumptions and
qualifications:
(i) The provisions of the Pledge Agreement are effective to create,
in favor of the Collateral Agent for the benefit of the Secured Creditors to
secure the Credit Document Obligations, a valid security interest in the rights
of Chartwell Lodging in the Pledged Partnership Interests.
(ii) I have assumed that the Pledged Partnership Interests exist and
that Chartwell Lodging has sufficient rights in the Pledged Partnership
Interests for the security interest of the Collateral Agent to attach, and I
express no opinion as to the nature or extent of Chartwell Lodging's rights in,
or title to, any of the Pledged Partnership Interests;
(iii) my security interest opinions are limited to Article 9 of
the UCC, and therefore such opinions do not address (i) laws of
jurisdictions other than California, and of California except for Article 9
of the UCC, (ii) collateral of a type not subject to Article 9 of the UCC,
and (iii) under Section 9-103 of the UCC, what law governs perfection of
the security interests granted in the collateral covered by this opinion;
(iv) I call to your attention that under the UCC, events
occurring subsequent to the date hereof may affect any security interest
subject to the UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-402 with
respect to changes in name, structure and corporate identity of the debtor;
Section 9-103 with respect to the location of the debtor; Section 9-316
with respect to subordination agreements; Section 9-403 with respect to
continuation statements; and Sections 9-307, 9-308 and 9-309 with respect
to subsequent purchasers of the collateral. In addition, actions taken by
a secured party (e.g., releasing or assigning the security interest,
delivering possession of the collateral to the debtor or another person and
voluntarily subordinating a security interest) may affect the validity,
perfection or priority of a security interest;
(v) I express no opinion with respect to the priority of the
security interest of the Collateral Agent in any of the Pledged Partnership
Interests;
(vi) I call to your attention that the security interest of the
Collateral Agent may be subject to the terms of
any of the agreements creating the Pledged Partnership Interests and claims and
defenses of any of the parties to such agreements;
(vii) in the case of any Pledged Partnership Interest which is
itself secured by other property, I express no opinion with respect to the
Collateral Agent's rights in and to such underlying property;
(viii) I have assumed that Chartwell Lodging's chief executive
offices are and will be located in the State of California;
(ix) I call to your attention that in the case of the issuance
of distributions on, or proceeds of, the Pledged Partnership Interests, the
security interests of the Collateral Agent therein will be perfected only
if possession thereof is obtained or other appropriate action is taken in
accordance with the provisions of the UCC or other applicable law and, in
the case of certain types of distributions or proceeds, other parties such
as holders in due course, bona fide purchasers and buyers in the ordinary
course of business may obtain superior priority;
(x) I have assumed without independent investigation that none
of the Pledged Partnership Interests are (i) represented by a certificate
or (ii) transferred on books and records of the partnership or an agent of
the partnership maintained for that purpose; and
(xi) I call to your attention that the right of the Collateral
Agent to become a partner or exercise voting rights may be limited by
applicable law and the terms of the partnership agreement pursuant to which
the partnership was formed, as amended from time to time, and that the only
remedy may be the right to receive distributions to which Chartwell Lodging
is otherwise entitled pursuant to the applicable partnership agreement.
This opinion is being furnished only to you and is solely for your
benefit and is not to be used, circulated, quoted, relied upon or otherwise
referred to by any other Person or for any other purpose without my prior
written consent, provided that any Person which becomes a Bank pursuant to
Section 14.04 of the Credit Agreement may rely on this opinion as if it were
addressed to such Person and delivered to such Person on the date hereof.
Very truly yours,
Schedule I
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Banks
-----
The Chase Manhattan Bank
The Bank of Nova Scotia
[Other Banks]
EXHIBIT A
Fact Certificate
----------------
The undersigned is a duly qualified and acting authorized officer of
Chartwell Lodging Inc. (the "Company"). I understand that pursuant to Section
5.04 of that certain Credit Agreement, dated as of August 28, 1996 (the "Credit
Agreement"), among Chartwell Leisure Inc. (formerly National Lodging Corp.),
Chartwell Canada Corp., the lenders named therein, The Chase Manhattan Bank, as
Administrative Agent, and The Bank of Nova Scotia, as Syndication Agent, Xxxxxxx
Xxxxxx, Esq., Vice President and General Counsel of Chartwell Leisure Inc., is
rendering an opinion dated August 28, 1996 (the "Opinion"). Capitalized terms
used herein but not otherwise defined shall have the meanings set forth in the
Opinion. I further understand that Xxxxxxx Xxxxxx, Esq. is relying on this
officer's certificate and the statements made herein in rendering such Opinion.
With regard to the foregoing, on behalf of the Company I certify that:
1. The chief executive office of the Company is 0000 Xxxxxxxxxx Xxxxx, Xx
Xxxxx, Xxxxxxxxxx 00000.
2. None of the partnership interests of any Transaction Party identified
in Annex C to the Pledge Agreement are evidenced by a certificate.
IN WITNESS WHEREOF I have executed this certificate this 28th day of
August 1996.
By: _____________________________
Name:
EXHIBIT N
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Subordination Provisions of
Permitted Subordinated Indebtedness
-----------------------------------
ARTICLE X
SUBORDINATION
SECTION X.1. Securities Subordinated to Senior Indebtedness.
Anything herein to the contrary notwithstanding, the Borrower, for
itself and its successors, and each Holder, by its acceptance of Securities,
agrees, that the payment of the principal of and interest on and premiums,
penalties, fees and other liabilities (including, without limitation,
liabilities in respect of any indemnity, any reimbursement, compensation or
contribution obligations, any liquidated damage provision, any breach of
representation or warranty, or any rights of redemption or rescission under this
Indenture, the Purchase Agreement and the Registration Rights Agreement or by
law or otherwise ("Other Obligations")) with respect to the Securities is
subordinated, to the extent and in the manner provided in this Article X, to the
prior payment in full in cash of all Senior Indebtedness.
This Article X shall constitute a continuing offer to all persons who
become holders of, or continue to hold, Senior Indebtedness, and such provisions
are made for the benefit of the holders of Senior Indebtedness and such holders
are made obligees hereunder and any one or more of them may enforce such
provisions. Holders of Senior Indebtedness need not prove reliance on the
subordination provisions hereof.
SECTION X.2. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment or distribution shall be made by or
on behalf of the Borrower on account of principal of or interest on or Other
Obligations with respect to the Securities or to acquire, repurchase, redeem,
retire or defease any of the Securities or on account of the redemption
provisions of the Securities (i) upon the maturity of any Senior Indebtedness by
lapse of time, acceleration or otherwise, unless and until all principal thereof
and interest (including Accrued Bankruptcy Interest) thereon (and, in the case
of the Loan Documents and Supplementary Documents, all obligations for payments
for early termination, fees, expenses, indemnities and other amounts payable
thereunder or in connection therewith) shall first be paid in full in cash, and
all Letter of Credit Obligations, to the extent that the related letters of
credit have not been drawn upon, shall have been fully secured by collateral in
the form of cash or Cash Equivalents or shall have been returned undrawn or (ii)
upon the happening of any default in payment of any principal of or interest on
any Senior Indebtedness (or, in the case of the Loan Documents and Supplementary
Documents, any payment for early termination, fees, expenses, indemnities and
other amounts payable thereunder or in connection therewith when the same
becomes due and payable (any event described in clause (i) or (ii), a "Payment
Default"), unless and until such default shall have been cured or waived or
shall have ceased to exist.
(b) Without limiting the effect of Section X.2(a), upon the happening
of a default or event of default (other than a Payment Default) (including any
event which, with the giving of notice or lapse of time, or both, would become
an event of default and including any default or event of default that would
result upon any payment with respect to the Securities) with respect to any
Senior Indebtedness, as such default or event of default is defined therein or
in the instrument or agreement under which it is outstanding, and upon written
notice thereof given to the Trustee (with a copy to the Borrower) by any holders
of such Senior Indebtedness or their Representative ("Payment Notice"), then,
unless and until such default or event of default shall have been cured or
waived or shall have ceased to exist or the Credit Agent approves in writing the
making of such payment or distribution, no direct or indirect payment or
distribution shall be made by or on behalf of the Borrower on account of
principal of or interest on or Other Obligations with respect to the Securities
or to acquire, repurchase, redeem, retire or defease any of the Securities or on
account of the redemption provisions of the Securities; provided, however, that
this paragraph (b) shall not prevent the making of any payment for more than 179
days after the due date of the first principal or interest payment on the
Securities (including any redemption or mandatory repurchase of Securities
required hereunder) after a Payment Notice shall have been given.
-2-
Notwithstanding the foregoing (i) not more than one Payment Notice shall
be given within any period of 360 consecutive days, and (ii) a Payment Notice
may only be given (A) if Senior Indebtedness is outstanding under the Credit
Agreement at the time of such notice, by the Credit Agent or (B) if no Senior
Indebtedness is outstanding under the Credit Agreement at the time of such
notice, by a holder or holders (or the Representative of holders) of at least
$15,000,000 principal amount of Senior Indebtedness.
(c) In furtherance of the provisions of Section X.1, if,
notwithstanding the foregoing provisions of this Section X.2, any direct or
indirect payment or distribution on account of principal of or interest on or
Other Obligations with respect to the Securities or to acquire, repurchase,
redeem, retire or defease any of the Securities or on account of the redemption
provisions of the Securities shall be made by or on behalf of the Borrower and
received by the Trustee, by any Holder or by any Paying Agent (or, if the
Borrower or any subsidiary or Affiliate of the Borrower is acting as Paying
Agent, money for any such payment or distribution shall be segregated and held
in trust), at a time when such payment or distribution was prohibited by the
provisions of this Section X.2, then, unless and until such payment or
distribution is no longer prohibited by this Section X.2, such payment or
distribution (subject to the provisions of Sections X.6 and X.7) shall be
received, segregated from other funds, and held in trust by the Trustee or such
Holder or Paying Agent, as the case may be, for the benefit of, and shall be
immediately paid over to, the holders of Senior Indebtedness or their
Representative, ratably according to the respective amounts of Senior
Indebtedness held or represented by each, to the extent necessary to (A) make
payment in full in cash of all Senior Indebtedness remaining unpaid and (B) in
the case of Letter of Credit Obligations, to the extent the related letters of
credit have not been drawn upon or returned undrawn, to fully secure such Senior
Indebtedness by collateral in the form of cash or Cash Equivalents, in each case
after giving effect to all concurrent payments and distributions to or for the
holders of Senior Indebtedness. The Borrower shall give prompt notice to the
Trustee of any default or event of default or any acceleration under any Senior
Indebtedness or under any agreement pursuant to which Senior Indebtedness may
have been issued. Failure to give such notice shall not affect the
subordination of the Securities to Senior Indebtedness provided in this Article
X. Notwithstanding anything to the contrary contained herein, in the absence of
its gross negligence or wilful misconduct, the Trustee shall have no duty to
collect or retrieve monies previously paid by it in good faith; provided that
this sentence shall not affect the obligation of any other party receiving such
payment to hold such payment for the benefit of, and to pay such payment over
to, the holders of Senior Indebtedness or their Representative.
SECTION X.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of
Borrower.
Upon any payment or distribution of assets or securities of the
Borrower of any kind or character, whether in cash, property or securities, upon
any dissolution, winding-up, total or partial liquidation or total or partial
reorganization of the Borrower (including, without limitation, in bankruptcy,
insolvency or receivership proceedings or upon any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Borrower and
whether voluntary or involuntary):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payments in full in cash of the principal thereof and interest
(including Accrued Bankruptcy Interest) thereon (and, in the case of the
Loan Documents and Supplementary Documents, all payments for early
termination, fees, expenses, indemnities and other amounts payable
thereunder or in connection therewith) and, in the case of Letter of Credit
Obligations, to the extent the related letters of credit have not been
drawn upon or returned undrawn, to have such Senior Indebtedness be fully
secured by collateral in the form of cash or Cash Equivalents before the
Holders are entitled to receive any payment on account of the principal of
or interest on or Other Obligations with respect to the Securities (whether
by payment, acquisition, retirement, defeasance, redemption or otherwise)
or any other payment or distribution of assets or securities by or on
behalf of the Borrower;
(b) any payment or distribution of assets or securities of the
Borrower of any kind or character, whether in cash, property or securities,
to which the Holders or the Trustee on behalf of the Holders would be
entitled except for the provisions of this Article X, including any such
payment or
-3-
distribution that is payable or deliverable by reason of the payment of any
other Indebtedness of the Borrower being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other
person making such a payment or distribution, directly to the holders of
Senior Indebtedness or their Representative, ratably according to the
respective amounts of Senior Indebtedness held or represented by each,
until all Senior Indebtedness remaining unpaid shall have been paid in full
in cash and, in the case of Letter of Credit Obligations, to the extent the
related letters of credit have not been drawn upon or returned undrawn,
until all such Senior Indebtedness shall be fully secured by collateral in
the form of cash or Cash Equivalents or shall have been returned undrawn,
in each case after giving effect to all concurrent payments and
distributions to or for the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of the Borrower of any kind or
character, whether in cash, property or securities, shall be received by
the Trustee or the Holders or any Paying Agent (or, if the Borrower or any
Subsidiary or Affiliate of the Borrower is acting as Paying Agent, money,
assets or securities of any kind or character for any such payment or
distribution shall be segregated or held in trust) on account of principal
of or interest on or Other Obligations with respect to the Securities
before all Senior Indebtedness is paid in full in cash, such payment or
distribution (subject to the provisions of Sections X.6 and X.7) shall be
received, segregated from other funds, and held in trust by the Trustee or
such Holder or Paying Agent for the benefit of, and shall immediately be
paid over to, the holders of Senior Indebtedness or their Representative,
ratably according to the respective amounts of Senior Indebtedness held or
represented by each, until all Senior Indebtedness remaining unpaid shall
have been paid in full in cash and, in the case of Letter of Credit
Obligations, to the extent the related letters of credit have not been
drawn upon or returned undrawn, until all such Senior Indebtedness shall be
fully secured by collateral in the form of cash or Cash Equivalents or
shall have been returned undrawn, in each case after giving effect to all
concurrent payments and distributions to or for the holders of Senior
Indebtedness. Notwithstanding anything to the contrary contained herein,
in the absence of its gross negligence or wilful misconduct, the Trustee
shall have no duty to collect or retrieve monies previously paid by it in
good faith; provided that this sentence shall not affect the obligation of
any other party receiving such payment to hold such payment for the benefit
of, and to pay over such payment over to, the holders of Senior
Indebtedness or their Representative.
The Borrower shall give prompt notice to the Trustee prior to any
dissolution, winding-up, total or partial liquidation or total or partial
reorganization of the Borrower or assignment for the benefit of creditors by the
Borrower.
SECTION X.4. Securityholders to Be Subrogated to Rights of Holders of Senior
Indebtedness.
Subject to the payment in full in cash of all Senior Indebtedness and,
in the case of Letter of Credit Obligations, to the extent that the related
letters of credit have not been drawn upon or returned undrawn, subject to the
securing in full of such Senior Indebtedness by collateral in the form of cash
or Cash Equivalents, the Holders of Securities shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
assets of the Borrower applicable to the Senior Indebtedness (other than the
rights to receive payments or distributions with respect to, or rights in
collateral securing, reimbursement obligations for subsequently drawn Letter of
Credit Obligations until such reimbursement obligations are paid in full in
cash) until all amounts owing on the Securities shall be paid in full in cash,
and for the purpose of such subrogation no payments or distributions to the
holders of Senior Indebtedness by or on behalf of the Borrower, or by or on
behalf of the Holders by virtue of this Article X, which otherwise would have
been made to the Holders, shall, as between the Borrower and the Holders, be
deemed to be payment by the Borrower to or on account of the Senior
Indebtedness, it being understood that the provisions of this Article X are and
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior Indebtedness, on the other
hand.
-4-
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article X shall have been
applied, pursuant to the provisions of this Article X, to the payment of all
amounts payable under the Senior Indebtedness and to secure Senior Indebtedness
represented by Letter of Credit Obligations to the extent that the related
letters of credit have not been drawn upon or returned undrawn, then the Holders
shall be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of the Senior Indebtedness in full in cash and to fully secure Senior
Indebtedness represented by Letter of Credit Obligations to the extent that the
related letters of credit have not been drawn upon or returned undrawn in the
form of cash or Cash Equivalents.
SECTION X.5. Obligations of the Borrower Unconditional.
Nothing contained in this Article X or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Borrower and
the Holders, the obligation of the Borrower, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Borrower other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
X, of the holders of Senior Indebtedness in respect of cash, property or
securities of the Borrower received upon the exercise of any such remedy. Upon
any payment or distribution of assets or securities of the Borrower referred to
in this Article X, the Trustee, subject to the provisions of Sections ____ and
____ [Insert reference to provisions setting forth Trustee's rights and duties],
and the Holders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which any dissolution, winding-up,
liquidation or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee or agent or other person
making any payment or distribution to the Trustee or to the Holders for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other Indebtedness of the
Borrower, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article X.
Nothing in this Section X.5 shall apply to the claims of, or payments to, the
Trustee under or pursuant to Section ____ [Insert provision setting forth
Trustee's compensation].
SECTION X.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until the Trustee or any Paying Agent shall have received
written notice thereof from the Borrower or from one or more holders of Senior
Indebtedness or from any Representative therefor and, prior to the receipt of
any such notice, the Trustee, subject to the provisions of Sections ____ and
____ [Insert reference to provisions setting forth Trustee's rights and duties],
shall be entitled in all respects conclusively to assume that no such fact
exists.
SECTION X.7. Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Section ____ [Insert
reference to defeasance provisions] (including, without limitation, clause __
thereof [Insert reference to provision prohibiting defeasance if doing so would
violate a contractual obligation of the Parent or Borrower]) shall be for the
sole benefit of Securityholders and, to the extent allocated for the payment of
Securities, shall not be subject to the subordination provisions of this Article
X. Otherwise, any deposit of assets or securities by or on behalf of the
Borrower with the Trustee or any Paying Agent (whether or not in trust) for the
payment of principal of or interest on or Other Obligations with respect to any
Securities shall be subject to the provisions of this Article X; provided that
if prior to the Business Day preceding the date on which by the terms of this
Indenture any such assets may become distributable for any purpose (including,
without limitation, the payment of either principal of or interest on any
Security) the Trustee or such Paying Agent shall not have received with respect
to such assets the notice provided for in Section X.6, then the Trustee or such
Paying Agent shall have full power and authority to receive such assets and to
apply the same to the purpose for
-5-
which they were received, and shall not be affected by any notice to the
contrary received by it on or after such date. The foregoing shall not apply to
the Paying Agent if the Borrower or any Subsidiary or Affiliate of the Borrower
is acting as Paying Agent. Nothing contained in this Section X.7 shall limit the
right of the holders of Senior Indebtedness to recover payments as contemplated
by this Article X.
SECTION X.8. Subordination Rights Not Impaired by Acts or Omissions of Borrower
or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce the subordination provisions contained in this Article X shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Borrower or by any act or failure to act, in good faith, by any such
holder, or by any non-compliance by the Borrower with the terms of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with. The holders of Senior Indebtedness may extend,
renew, restate, supplement, modify or amend the terms of the Senior Indebtedness
or any security therefor and release, sell or exchange such security and
otherwise deal freely with the Borrower and its Subsidiaries, all without
affecting the liabilities and obligations of the parties to this Indenture or
the Holders. No provision in any supplemental indenture that affects the
subordination of the Securities or other provisions of this Article X shall be
effective against the holders of the Senior Indebtedness who have not consented
thereto.
[Each Holder of the Securities by his acceptance thereof agrees that
the Representative of any Senior Indebtedness (including, without limitation,
the Credit Agent), in its discretion, without notice or demand and without
affecting any rights of any holder of Senior Indebtedness under this Article X,
may foreclose any mortgage or deed of trust covering interests in real property
secured thereby, by judicial or non-judicial sale; and such Holder hereby waives
any defense to the enforcement by the Representative of any Senior Indebtedness
(including, without limitation, the Credit Agent) or by any holder of any Senior
Indebtedness against such Holder of this Article X after a judicial or non-
judicial sale or other disposition of its interests in real property secured by
such mortgage or deed of trust; and such Holder expressly waives any defense or
benefits that may be derived from California Civil Code (S)(S) 2808, 2809, 2810,
2819, 2845, 2849 or 2850, or California Code of Civil Procedure (S)(S) 580a,
580d or 726, or comparable provisions of the laws of any other jurisdiction or
any similar statute in effect in any other jurisdiction.]
SECTION X.9. Securityholders Authorize Trustee to Effectuate Subordination of
Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effect the subordination provisions contained in
this Article X, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Borrower (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Borrower) tending towards
liquidation or reorganization of the business and assets of the Borrower, the
immediate filing of a claim for the unpaid balance of its or his Securities and
Other Obligations in the form required in said proceedings and cause said claim
to be approved. If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding prior to 30 days before the expiration of
the time to file such claim or claims, then the holders of the Senior
Indebtedness or their Representative is hereby authorized to file an appropriate
claim for and on behalf of the Holders of said Securities. Nothing herein
contained shall be deemed to authorize the Trustee or the holders of Senior
Indebtedness or their Representative to authorize or consent to or accept or
adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee or the holders of Senior Indebtedness or
their Representative to vote in respect of the claim of any Securityholder in
any such proceeding.
-6-
SECTION X.10. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article X in respect of any Senior Indebtedness at any time held by it to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
SECTION X.11. Article X Not to Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article X shall not be
construed as preventing the occurrence of a Default or an Event of Default under
Section ____ [Insert reference to Event of Default Section].
SECTION X.12. No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and shall not be liable to any such holders
(other than for its willful misconduct or gross negligence) if it shall in good
faith mistakenly pay over or deliver to the Holders of Securities or the
Borrower or any other person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article X or otherwise.
Nothing in this Section X.12 shall affect the obligation of any person other
than the Trustee to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Indebtedness or their Representative.
Certain Definitions. As used in this Schedule ______, the following
terms have the following meanings:
"Accrued Bankruptcy Interest" means all interest accruing after the
filing of a petition by or against the Borrower or the Canadian Borrower
under any Bankruptcy Law, in accordance with and at the rate (including any
rate applicable upon any default or event of default, to the extent lawful)
specified in the Loan Documents, whether or not the claim for such interest
is allowed as a claim after such filing in any proceeding under such
Bankruptcy Law.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Borrower" means Chartwell Leisure Inc.
"Canadian Borrower" means Chartwell Canada Corp.
"Cash Equivalents" means Permitted Investments.
"Credit Agent" means, at any time, the then-acting Administrative
Agent as defined in and under the Credit Agreement, which initially shall
be The Chase Manhattan Bank. The Borrower shall promptly notify the
Trustee of any change in the Credit Agent.
"Credit Agreement" means the Credit Agreement, dated as of August ___,
1996, by and among the Borrower, the Canadian Borrower, the Lenders and
Issuing Banks referred to therein, The Bank of Nova Scotia, Ltd., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent,
as amended, extended, renewed, restated, supplemented or otherwise modified
(in whole or in part, and without limitation as to amount, terms,
conditions, covenants and other provisions) from time to time, and any
agreement governing Indebtedness incurred to refund or refinance a
substantial portion of the borrowings and commitments then outstanding or
permitted to be outstanding under the Credit Agreement or such agreement;
provided that such refunding or refinancing by its terms states that it is
intended to be senior in right of payment to the Securities. The Borrower
shall promptly notify the Trustee of any such
-7-
refunding or refinancing of the Credit Agreement; provided that failure to
give such notice shall not impair the subordination provisions hereof.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books or otherwise having a legal or
beneficial interest in a Security.
"Indenture" means the Indenture pursuant to which the Securities are
issued.
"Interest Swap Obligation" means any obligation of any person pursuant
to any arrangement with any other person whereby, directly or indirectly,
such person is entitled to receive from time to time periodic payments
calculated by applying either a fixed or floating rate of interest on a
stated notional amount in exchange for periodic payments made by such
person calculated by applying a fixed or floating rate of interest on the
same notional amount; provided that the term "Interest Swap Obligation"
shall also include interest rate exchange, collar, cap, swap option or
similar agreements providing interest rate protection.
"Letter of Credit Obligations" means Senior Indebtedness with respect
to letters of credit issued and outstanding pursuant to the Credit
Agreement.
"Loan Documents" means the Credit Agreement and all promissory notes,
guarantees, security agreements, pledge agreements, deeds of trust,
mortgages, letters of credit and other instruments, agreements and
documents executed pursuant thereto or in connection therewith, including
all amendments, supplements, extensions, renewals, restatements,
replacements or refinancings thereof, or other modifications (in whole or
in part, and without limitation as to amount, terms, conditions, covenants
or other provisions) thereof from time to time.
"Paying Agent" means any Paying Agent under the Indenture.
"Purchase Agreement" means the several Purchase Agreements by and
among the Borrower and the Purchasers, each dated as of ________ ___, 199__
providing for the purchase of the Securities.
"Purchasers" means the Purchasers named on the execution pages
attached to the Purchase Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement by and among the Borrower and the Purchasers, dated as of _______
____, 199__.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Indebtedness; provided that the person
acting as Trustee may not serve as a Representative.
"Securities" means the securities evidencing the Permitted
Subordinated Indebtedness.
"Senior Indebtedness" means (x) all obligations of the Borrower now or
hereafter existing, whether directly or by guarantee, to pay the principal
of, and interest (including, in the case of the Loan Documents and the
Supplementary Documents, Accrued Bankruptcy Interest with respect thereto)
on, any Indebtedness of the Borrower (and, in the case of the Loan
Documents and the Supplementary Documents, all obligations of the Borrower
for all payments for early termination, fees, expenses, indemnities and
other amounts payable thereunder or in connection therewith), whether
outstanding on the date of this Indenture or hereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Borrower (including,
without limitation, Indebtedness under the Loan Documents and the
Supplementary Documents and all obligations of the Borrower to indemnify
the Credit Agent, the Lenders, the Issuing Banks and the other Agents
thereunder pursuant to the Loan Documents and all obligations of the
Borrower for all payments for early termination, fees, expenses and
indemnities and other amounts payable thereunder or in connection therewith
if the instrument creating or evidencing the
-8-
same expressly provides that such Indebtedness shall be senior in right of
payment to the Securities, (y) Indebtedness of the Borrower, whether direct
or by guarantee, with respect to Interest Swap Obligations and (z) all
obligations of the Borrower in respect of any financing of accounts
receivable of the Borrower and its subsidiaries.
"Supplementary Documents" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements designed to hedge against fluctuations in interest rates or
foreign exchange rates.
"Trustee" means the Trustee for the Securities under the Indenture.
Exhibit O
SECURITY AGREEMENT
among
CHARTWELL CANADA HOSPITALITY CORP.
and
the other parties from time to time parties thereto
and
THE CHASE MANHATTAN BANK,
as Collateral Agent
Dated as of October 1, 1996
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
SECURITY INTERESTS....................................... 2
1.1 Grant of Security Interests.............................. 2
1.2 Power of Attorney........................................ 3
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS........ 3
2.1 Necessary Filings........................................ 3
2.2 No Liens................................................. 3
2.3 Other Financing Statements............................... 4
2.4 Chief Executive Office; Records.......................... 4
2.5 Recourse................................................. 5
2.6 Trade Names; Change of Name.............................. 5
ARTICLE III
SPECIAL PROVISIONS CONCERNING MANAGEMENT AGREEMENT
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS................ 5
3.1 Maintenance of Records 5
3.2 Direction to Account Debtors; Contracting Parties; etc... 6
3.3 Modification of Terms; etc............................... 6
3.4 Collection............................................... 7
3.5 Instruments.............................................. 7
3.6 Further Actions.......................................... 7
ARTICLE IV
PROVISIONS CONCERNING ALL COLLATERAL.................... 8
4.1 Protection of Collateral Agent's Security............... 8
4.2 Further Actions......................................... 8
4.3 Financing Statements.................................... 8
(i)
ARTICLE V
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT............ 9
5.1 Remedies; Obtaining the Collateral Upon Default......... 9
5.2 Remedies; Disposition of the Collateral................. 10
5.3 Waiver of Claims........................................ 11
5.4 Application of Proceeds................................. 12
5.5 Remedies Cumulative..................................... 13
5.6 Discontinuance of Proceedings........................... 14
ARTICLE VI
INDEMNITY............................................... 14
6.1 Indemnity............................................... 14
6.2 Indemnity Obligations Secured by Collateral; Survival... 15
ARTICLE VII
DEFINITIONS............................................. 16
ARTICLE VIII
MISCELLANEOUS........................................... 20
8.1 Notices................................................. 20
8.2 Waiver; Amendment....................................... 21
8.3 Obligations Absolute.................................... 21
8.4 Successors and Assigns.................................. 21
8.5 Headings Descriptive.................................... 22
8.6 Governing Law........................................... 22
8.7 Assignor's Duties....................................... 22
8.8 Termination; Release.................................... 22
8.9 Counterparts............................................ 23
8.10 The Collateral Agent.................................... 23
ANNEX A Schedule of Chief Executive Offices and other Record Locations
ANNEX B Trade and Fictitious Names
(ii)
SECURITY AGREEMENT
------------------
SECURITY AGREEMENT, dated as of October 1, 1996 among Chartwell Canada
Hospitality Corp. and Chartwell Canada Corp. (collectively, the "Royco
Management Agreement Assignor"), Chartwell Leisure Inc. (together with the Royco
Management Agreement Assignor, each an "Assignor" and, together with any other
entity that becomes a party hereto pursuant to Section 8.11 hereof, the
"Assignors") and The Chase Manhattan Bank, as Collateral Agent (the "Collateral
Agent"), for the benefit of the Secured Creditors (as defined below). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
(as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
-------------------
WHEREAS, Chartwell Leisure Inc. (the "Company"), Chartwell Canada
Corp. and Bear Financial Corp. (collectively, the "Canadian Borrower, and
together with the Company, the "Borrowers"), the lenders from time to time party
thereto (the "Banks"), The Bank of Nova Scotia, as Syndication Agent, and The
Chase Manhattan Bank, as Administrative Agent (together with any successor
agent, the "Administrative Agent," and together with the Collateral Agent, the
Syndication Agent and the Banks, the "Bank Creditors"), have entered into the
Credit Agreement, dated as of August 28, 1996 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to the Borrowers and the issuance of, and participation in,
Letters of Credit for the account of the Company, all as contemplated therein;
WHEREAS, each Borrower may from time to time be party to one or more
(i) interest rate agreements, interest rate cap agreements, interest rate collar
agreements or other similar agreements or arrangements, (ii) foreign exchange
contracts, currency swap agreements or similar agreements or arrangements
designed to protect against the fluctuations in currency values and\or (iii)
other types of hedging agreements from time to time (each such agreement or
arrangement with an Other Creditor (as hereinafter defined), an "Interest Rate
Protection Agreement or Other Hedging Agreement"), with a Bank or an affiliate
of a Bank (each such Bank or affiliate, even if the respective Bank subsequently
ceases to be a Bank under the Credit Agreement for any reason, together with
such Bank's or affiliate's successors and assigns, collectively, the "Other
Creditors", and together with the Bank Creditors, the "Secured Creditors");
Page 2
WHEREAS, pursuant to the Company Guaranty, the Company has guaranteed
to the Secured Creditors the payment when due of all obligations and liabilities
of the Canadian Borrower under or with respect to the Credit Documents and the
Interest Rate Protection Agreements or Other Hedging Agreements;
WHEREAS, pursuant to the Subsidiary Guaranty, each domestic Subsidiary
of the Borrower has jointly and severally guaranteed to the Secured Creditors
the payment when due of all obligations and liabilities of the Borrowers under
or with respect to the Credit Documents and the Interest Rate Protection
Agreements or Other Hedging Agreements;
WHEREAS, it is a condition precedent to the making of Loans to the
Borrowers under the Credit Agreement that the Assignors shall have executed and
delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to satisfy
the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent and hereby covenants and agrees with the Collateral Agent as
follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) As security for the prompt and
---------------------------
complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority in, all of the
right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired: (i)
each and every Management Agreement Receivable, (ii) all Pledged Management
Agreements, together with all Contract Rights arising thereunder, (iii) all
computer programs of such Assignor and all intellectual property rights therein
and all other proprietary information of such Assignor, including, but not
limited to, trade secrets, in each case relating to or arising out of Pledged
Management Agreements, (iv) all General Intangibles, Chattel Paper, Documents
and Instruments, in each case relating to or arising out of Pledged Management
Agreements,
Page 3
(v) the Cash Collateral Account and all monies, securities and instruments
deposited or required to be deposited in such Cash Collateral Account, and (vi)
all Proceeds and products of any and all of the foregoing (all of the above,
collectively, the "Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2 Power of Attorney. Each Assignor hereby constitutes and appoints
-----------------
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all monies and claims for monies due
or to become due to such Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable to protect the interests
of the Secured Creditors, which appointment as attorney is coupled with an
interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1 Necessary Filings. All filings, registrations and recordings
-----------------
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral creates a
perfected security interest therein prior to the rights of all other Persons
therein and subject to no other Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the Uniform
Commercial Code or other relevant law as enacted in any relevant jurisdiction to
perfected security interests.
2.2 No Liens. Such Assignor is, and as to Collateral acquired by it
--------
from time to time after the date hereof such Assignor will be, the owner of, or
has rights in, all Collateral free from any Lien, security interest, encumbrance
or other right, title or interest of any Person (other than Permitted Liens),
and such Assignor shall defend the Collateral to the extent of its rights
therein against all claims and demands of all Persons at any time claiming the
same or any interest therein adverse to the Collateral Agent.
Page 4
2.3 Other Financing Statements. As of the date hereof, there is no
--------------------------
financing statement (or similar statement or instrument of registration under
the law of any juris diction) covering or purporting to cover any interest of
any kind in the Collateral (other than financing statements filed in respect of
Permitted Liens), and so long as the Total Commitment has not been terminated or
any Note remains unpaid or any of the Obligations remain unpaid or any Interest
Rate Protection Agreement or Other Hedging Agreement or Letter of Credit remains
in effect (other than Letters of Credit, together with all Fees that have
accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been supported in a manner satisfactory to the
Letter of Credit Issuer in its sole and absolute discretion) or any Obligations
are owed with respect thereto, such Assignor will not execute or authorize to be
filed in any public office any financing state ment (or similar statement or
instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by such Assignor
or as permitted by the Credit Agreement.
2.4 Chief Executive Office; Records. The chief executive office of
-------------------------------
such Assignor is located at the address or addresses indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents
evidencing Management Agreement Receivables and Contract Rights under Pledged
Management Agreements of such Assignor and the only original books of account
and records of such Assignor relating thereto are, and will con tinue to be,
kept at such chief executive office, at one or more of the locations set forth
on Annex A hereto or at such new locations as such Assignor may establish in
accordance with the last sentence of this Section 2.4. All Collateral
consisting of Management Agreement Receivables and Contract Rights under Pledged
Management Agreements of such Assignor are, and will continue to be, maintained
at, and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above or such new
location established in accordance with the last sentence of this Section 2.4.
No Assignor shall establish new locations for such offices until (i) it shall
have given to the Collateral Agent not less than 30 days' prior written notice
of its intention to do so, clearly describing such new location and providing
such other information in connection therewith as the Collateral Agent may
reasonably request and (ii) with respect to such new location, it shall have
taken all action, satisfactory to the Collateral Agent, to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby
at all times fully perfected and in full force and effect.
2.5 Recourse. This Agreement is made with full recourse to each
--------
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on
Page 5
the part of such Assignor contained herein, in the other Credit Documents, in
the Interest Rate Protection Agreements or Other Hedging Agreements and
otherwise in writing in connection herewith or therewith.
2.6 Trade Names; Change of Name. No Assignor has or operates in any
---------------------------
jurisdiction under, or in the preceding 12 months has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name and such other trade or fictitious names as are listed on Annex B
hereto. No Assignor shall change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names listed
on Annex B hereto and new names established in accordance with the last sentence
of this Section 2.6. No Assignor shall assume or operate in any jurisdiction
under any new trade, fictitious or other name until (i) it shall have given to
the Collateral Agent not less than 30 days' prior written notice of its
intention so to do, clearly describing such new name and the jurisdictions in
which such new name shall be used and providing such other information in
connection therewith as the Collateral Agent may request and (ii) with respect
to such new name, it shall have taken all action requested by the Collateral
Agent, to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
MANAGEMENT AGREEMENT RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1 Maintenance of Records. Each Assignor will keep and maintain at
----------------------
its own cost and expense accurate records of its Management Agreement
Receivables and Pledged Management Agreements, records of all payments received,
all credits granted thereon, all merchandise returned and all other dealings
therewith, and such Assignor will make the same available on such Assignor's
premises to the Collateral Agent for inspection, at such Assignor's own cost and
expense, at any and all reasonable times upon prior notice to an Authorized
Officer of such Assignor. Upon the occurrence and during the continuance of an
Event of Default and at the request of the Collateral Agent, such Assignor
shall, at its own cost and expense, deliver all tangible evidence of its
Management Agreement Receivables and Contract Rights under Pledged Management
Agreements (including, without limitation, all documents evidencing such
Management Agreement Receivables and all Pledged Management Agreements) and such
books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by such Assignor). Upon the
occurrence and during the continuance of an Event of Default and if
Page 6
the Collateral Agent so directs, such Assignor shall legend, in form and manner
satisfactory to the Collateral Agent, the Management Agreement Receivables and
Pledged Management Agreements, as well as books, records and documents (if any)
of such Assig nor evidencing or pertaining to the Management Agreement
Receivables and Pledged Management Agreements with an appropriate reference to
the fact that such Management Agreement Receivables and Pledged Management
Agreements have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.
3.2 Direction to Account Debtors; Contracting Parties; etc. Upon the
-------------------------------------------------------
occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Management Agreement Receivables and Pledged
Management Agreements to be made directly to the Cash Collateral Account, (y)
that the Collateral Agent may, at its option, directly notify the obligors with
respect to any Management Agreement Receivables and/or under any Pledged
Management Agreements to make payments with respect thereto as provided in the
preceding clause (x) and (z) that the Collateral Agent may enforce collection of
any such Management Agreement Receivables and Pledged Management Agreements and
may adjust, settle or compromise the amount of payment thereof, in the same
manner and to the same extent as such Assignor. Without notice to or assent by
any Assignor, the Collateral Agent may apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account which application shall be
effected in the manner provided in Section 5.4 of this Agreement. The costs and
expenses (including reasonable attorneys' fees) of collection, whether incurred
by the Assignor or the Collateral Agent, shall be borne by the relevant
Assignor. The Collateral Agent shall deliver a copy of each notice referred to
in the preceding clause (y) to the relevant Assignor; provided, that the failure
--------
by the Collateral Agent to so notify such Assignor shall not affect the
effectiveness of such notice or the other rights of the Collateral Agent created
by this Section 3.3.
3.3 Modification of Terms; etc. No Assignor shall rescind or cancel
---------------------------
any indebtedness evidenced by any Management Agreement Receivable or under any
Pledge Management Agreements, or modify in any material respect any term thereof
or make any material adjustment with respect thereto, or extend or renew the
same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell or assign any Management Agreement
Receivable or Pledged Management Agreements, or interest therein, without the
prior written consent of the Collateral Agent, except as permitted by Section
3.5 hereof. Each Assignor will duly fulfill all obligations on its part to be
fulfilled under or in connection with the Management Agreement Receivables and
Pledged Management Agreements and will do nothing to impair the rights of the
Collateral Agent in the Management Agreement Receivables or Pledged Management
Agreements.
Page 7
3.4 Collection. Each Assignor shall endeavor in accordance with
----------
reasonable business practices to cause to be collected from the account debtor
named in each of its Management Agreement Receivables or obligor under any
Pledged Management Agreements, as and when due (including, without limitation,
amounts which are delinquent, such amounts to be collected in accordance with
generally accepted lawful collection procedures) any and all amounts owing under
or on account of such Management Agreement Receivable or Pledged Management
Agreements, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Management Agreement Receivable or
under such Pledged Management Agreement, except that, prior to the occurrence of
an Event of Default, any Assignor may allow in the ordinary course of business
as adjustments to amounts owing under its Management Agreement Receivables and
Pledged Management Agreements (i) an extension or renewal of the time or times
of payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly per formed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.5 Instruments. If any Assignor owns or acquires any Instrument
-----------
constituting Collateral, such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instru ment to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
3.6 Further Actions. Each Assignor will, at its own expense, make,
---------------
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Management Agreement Receivables, Contracts, Instruments
(in each case to the extent constituting Collateral) and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
Page 8
ARTICLE IV
PROVISIONS CONCERNING ALL COLLATERAL
4.1 Protection of Collateral Agent's Security. Each Assignor will do
-----------------------------------------
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.
4.2 Further Actions. (a) Each Assignor will, at its own expense,
---------------
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its Collateral,
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which the Collateral Agent deems reasonably appropriate or advisable to
perfect, preserve or protect its security interest in the Collateral.
(b) Each Assignor will, at its own expense, execute, file and/or
deliver to the Collateral Agent (i) supplements and/or amendments to this
Agreement and filed financing statements, (ii) new financing statements and
(iii) consents, in the form and as to the matters required by the Collateral
Agent, from the parties to the Pledged Management Agreements, in each case which
the Collateral Agent deems reasonably appropriate or advisable to perfect,
preserve or protect its security interest in the Pledged Management Agreements
and the proceeds thereof.
4.3 Financing Statements. Each Assignor agrees to execute and
--------------------
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby all in accordance with the Uniform
Commercial Code as enacted in any and all relevant jurisdictions or any other
relevant law. Each Assignor will pay any applicable filing fees, recordation
taxes and related expenses relating to its Collateral. Each Assignor hereby
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor where permitted by law.
Page 9
ARTICLE V
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
5.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor
-----------------------------------------------
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and
may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Management Agreement
Receivables and the Pledged Management Agreements) constituting the
Collateral to make any payment required by the terms of such agreement,
instrument or other obligation directly to the Collateral Agent;
(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 5.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the Collateral
or any part thereof in accordance with Section 5.2 hereof, or direct the
relevant Assignor to sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof, and, in each case, take possession of the
proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral Agent,
in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places
so designated by the Collateral Agent and there delivered to the
Collateral Agent;
Page 10
(y) store and keep any Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral
Agent as provided in Section 5.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such maintenance services as shall be necessary to protect the same
and to preserve and maintain them in good condition;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific per formance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least the
majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent or the holders of at least a
majority of the outstanding Interest Rate Obligations, as the case maybe, for
the benefit of the Secured Creditors upon the terms of this Agreement.
5.2 Remedies; Disposition of the Collateral. Any Collateral
---------------------------------------
repossessed by the Collateral Agent under or pursuant to Section 5.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the neces sity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
Page 11
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable re
quirements of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. To the extent permitted by any such
requirement of law, the Collateral Agent may bid for and become the purchaser of
the Collateral or any item thereof, offered for sale in accordance with this
Section without accountability to the relevant Assignor. If, under mandatory
requirements of applicable law, the Collateral Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory require ments of
applicable law.
5.3 Waiver of Claims. Except as otherwise provided in this
----------------
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights here under; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Page 12
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
5.4 Application of Proceeds. (a) All moneys collected by the
-----------------------
Collateral Agent (or, to the extent the Pledge Agreement requires proceeds of
collateral under the Pledge Agreement to be applied in accordance with the
provisions of this Agreement, the Pledgee under the Pledge Agreement) upon any
sale or other disposition of the Collateral, together with all other moneys
received by the Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the Collateral
Agent of the type provided in clauses (iii) and (iv) of the definition of
Obligations;
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Obligations shall be paid to the Secured Creditors as provided in Section
5.4(c) hereof with each Secured Creditor receiving an amount equal to its
outstanding Obligations or, if the proceeds are insufficient to pay in full
all such Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii) and following the
termination of this Agreement pursuant to Section 8.8 hereof, to the
relevant Assignor or, to the extent directed by such Assignor or a court of
competent jurisdiction, to whomever may be lawfully entitled to receive
such surplus.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean, when
calculating a Secured Creditor's portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then unpaid amount of such Secured Creditor's Obligations and the
denominator of which is the then outstanding amount of all Obligations.
(c) All payments required to be made to the Bank Creditors hereunder
shall be made to the Administrative Agent under the Credit Agreement for the
account of the Bank Creditors and all payments required to be made to the Other
Creditors hereunder shall be made directly to the respective Other Creditor.
Page 13
(d) For purposes of applying payments received in accordance with
this Section 5.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Other Creditors for
a determination (which the Administrative Agent, each Other Creditor and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Obligations owed to the Bank Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Bank Creditor or an Other Creditor)
to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence, and the Collateral
Agent, in acting hereunder, shall be entitled to assume that (x) no Credit
Document Obligations other than principal, interest and regularly accruing fees
are owing to any Bank Creditor and (y) no Interest Rate Protection Agreement or
Other Hedging Agreement, or Other Obligations in respect thereof, are in
existence.
(e) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency in payment of the Obligations
remaining after application of the proceeds of the Collateral with respect to
the relevant Assignor; provided that the only recourse of the Secured Creditors
to the Royco Management Contract Assignor shall be to its Collateral hereunder.
5.5 Remedies Cumulative. Each and every right, power and remedy
-------------------
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements or Other Hedging Agreements, the other
Credit Documents or now or hereafter existing at law, in equity or by statute
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the Collateral Agent. All
such rights, powers and remedies shall be cumulative and the exercise or the
beginning of the exercise of one shall not be deemed a waiver of the right to
exercise any other or others. No delay or omission of the Collateral Agent in
the exercise of any such right, power or remedy and no renewal or extension of
any of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. No notice to or demand on any Assignor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand. In the event that
the Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
Page 14
5.6 Discontinuance of Proceedings. In case the Collateral Agent
-----------------------------
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VI
INDEMNITY
6.1 Indemnity. (a) Each Assignor jointly and severally agrees to
---------
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees, agents and
servants (hereinafter in this Section 6.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including attorneys' fees and expenses) (for the purposes of this Section 6.1
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any Interest Rate Protection
Agreement or Other Hedging Agreement, any other Credit Document or any other
document executed in connection herewith or therewith or in any other way
connected with the administration of the transactions contemplated hereby or
thereby or the enforcement of any of the terms of, or the preservation of any
rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, con trol, acceptance,
lease, financing, possession, operation, condition, sale, return or other dis
position, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other govern mental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that no Indem
xxxxx shall be indemnified pursuant to this Section 6.1(a) for losses, damages
or liabilities to the extent caused by the gross negligence or willful
misconduct of such Indemnitee. Each Assignor agrees that upon written notice by
any Indemnitee of the assertion of such a liabil ity, obligation, damage,
injury, penalty, claim, demand, action, suit or judgment, the relevant Assignor
shall assume full responsibility for the defense thereof. Each Indemnitee
Page 15
agrees to use its best efforts to promptly notify the relevant Assignor of any
such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 6.1(a) hereof, each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 6.1(a) or (b) hereof,
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any Interest Rate
Protection Agreement or Other Hedging Agreement, any other Credit Document or in
any writing contemplated by or made or delivered pursuant to or in connection
with this Agreement, any Interest Rate Protection Agreement or Other Hedging
Agreement or any other Credit Document.
(d) If and to the extent that the obligations of any Assignor under
this Section 6.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
6.2 Indemnity Obligations Secured by Collateral; Survival. Any
-----------------------------------------------------
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VI shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and the payment of all other
Obligations and notwithstanding the discharge thereof.
Page 16
ARTICLE VII
DEFINITIONS
The following terms shall have the meanings herein specified. Such
defi nitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the recitals
to this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Banks" shall have the meaning provided in the recitals to this
Agreement.
"Borrowers" shall have the meaning provided in the recitals to this
Agreement.
"Canadian Borrower" shall have the meaning provided in the recitals to
this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 8.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
Page 17
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Company" shall have the meaning provided in the recitals to this
Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Pledged Management
Agreement.
"Credit Agreement" shall have the meaning provided in the recitals to
this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article VII.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 6.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Interest Rate Protection Agreements or Other Hedging Agreements"
shall have the meaning provided in the recitals to this Agreement.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
Page 18
"Management Agreement" shall mean each agreement or contract
governing, providing for, dealing with or relating to the management of any
Joint Venture or Hotel Property.
"Management Agreement Receivables" shall mean any "account" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York, now or hereafter owned by any Assignor relating to or
arising out of a Pledged Management Agreement and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor relating to or arising out
of a Pledged Management Agreement, whether now in existence or arising from time
to time hereafter, including, without limitation, rights evidenced by an
account, note, contract, security agreement, chattel paper, or other evidence of
indebtedness or security, together with, to the extent relating to or arising
out of a Pledged Management Agreement (a) all security pledged, assigned,
hypothecated or granted to or held by such Assignor to secure the foregoing, (b)
all of any Assignor's right, title and interest in and to any goods, the sale
of which gave rise thereto, (c) all guarantees, endorse ments and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
infor mation, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor, now existing or hereafter incurred under, arising out of or in
connection with any Credit Document to which such Assignor is a party and the
due performance and compliance by each Assignor with the terms of each such
Credit Document (all such obligations and liabilities under this clause (i),
except to the extent consisting of obligations or indebtedness with respect to
Interest Rate Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations"); (ii) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
of each Assignor now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement or Other Hedging
Agreement including, in the case of Assignors other than the Borrower, all
obligations of such Assignor under its Guaranty in respect of Interest Rate
Protection Agreements or Other Hedging
Page 19
Agreements (all such obligations and liabilities under this clause (ii)
being herein col lectively called the "Other Obligations"); (iii) any and all
sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of each Assignor referred to in clauses (i) and (ii), after an
Event of Default shall have occurred and be continuing, the reasonable expenses
of re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 6.1 of this
Agreement. Notwithstanding the foregoing, the Obligations of the Royco
Management Agreement Assignor secured by this Agreement and its Collateral
hereunder shall be all Obligations of each Borrower described in the preceding
sentence.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Pledged Management Agreements" shall mean the Royco Management
Agreement and each other Management Agreement required to be pledged as
Collateral hereunder pursuant to Section 9.14 of the Credit Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of gov ernmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 5.4(b) of
this Agreement.
"Requisite Creditors" shall have the meaning provided in Section 8.2
of this Agreement.
Page 20
"Royco Management Agreement" shall mean the Amended and Restated
Management Services and Franchise Development Agreement, dated October 1, 0000,
xxxxx Xxxxxxxxx Xxxxxx Hospitality Corp., Chartwell Canada Corp. and Royco
Hotels & Resorts Ltd., as the same be amended, modified or supplemented from
time to time.
"Secured Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Termination Date" shall have the meaning provided in Section 8.8 of
this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Notices. Except as otherwise specified herein, all notices,
-------
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at it address set forth opposite its
signature below;
(b) if to the Collateral Agent:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone No.: 000-0000
Facsimile No.: 972-0009
(c) if to any Bank Creditor (other than the Collateral Agent), at
such address as such Bank Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
Page 21
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
8.2 Waiver; Amendment. None of the terms and conditions of this
-----------------
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly affected thereby and the
Collateral Agent (with the consent of (x) either the Required Banks or, to the
extent required by Section 14.12 of the Credit Agreement, all of the Banks at
all times prior to the time on which all Credit Document Obligations have been
paid in full or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time on which all Credit Document Obligations
have been paid in full); provided, that any change, waiver, modification or
--------
variance affecting the rights and benefits of a single Class of Secured Credi
tors (and not all Secured Creditors in a like or similar manner) shall require
the written consent of the Requisite Creditors of such Class of Secured
Creditors. For the purpose of this Agreement the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Bank Creditors as holders of
----
the Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Banks and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection Agreements or Other Hedging
Agreements.
8.3 Obligations Absolute. The obligations of each Assignor hereunder
--------------------
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection Agreement or Other Hedging Agreement; or (c) any
amendment to or modification of any Credit Document or any Interest Rate
Protection Agreement or Other Hedging Agreement or any security for any of the
Obligations; whether or not any Assignor shall have notice or knowledge of any
of the foregoing.
8.4 Successors and Assigns. This Agreement shall be binding upon
----------------------
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and its successors and assigns; provided, that no Assignor
--------
may transfer or assign any or all of its rights or obligations hereunder without
the prior written consent of the Collateral Agent. All agreements, statements,
representations and warranties made by each Assignor herein or in any
certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of this Agreement, the
other Credit Documents
Page 22
and the Interest Rate Protection Agreements or Other Hedging Agreements
regardless of any investigation made by the Secured Creditors or on their
behalf.
8.5 Headings Descriptive. The headings of the several sections
-------------------------
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
8.6 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
------------------
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
8.7 Assignor's Duties. It is expressly agreed, anything herein
-----------------
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of each Assignor under or with
respect to any Collateral.
8.8 Termination; Release. (a) After the Termination Date, this
--------------------
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 6.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note or Letter of Credit is outstanding
(other than Letters of Credit, together with all Fees that have accrued and will
accrue thereon through the stated termination date of such Letters of Credit,
which have been supported in a manner satisfactory to the Letter of Credit
Issuer in its sole and absolute discretion) and all other Obligations (other
than any indemnities described in Section 6.1 hereof and in Section 14.01 of the
Credit Agreement which are not then due and payable) have been paid in full.
(b) In the event that any part of the Collateral is sold or otherwise
disposed in connection with a sale or other disposition permitted by Section
10.02 of the Credit
Page 23
Agreement or is otherwise released at the direction of the Required Banks (or
all the Banks if required by Section 14.12 of the Credit Agreement), the
Collateral Agent, at the request and expense of such Assignor, will duly release
from the security interest created hereby and assign, transfer and deliver to
such Assignor (without recourse and without any representation or warranty) such
of the Collateral as is then being (or has been) so sold or released and as may
be in the possession of the Collateral Agent and has not theretofore been
released pursuant to this Agreement.
(c) At any time that the respective Assignor desires that Collateral
be released as provided in the foregoing Section 8.8(a) or (b), it shall deliver
to the Collateral Agent a certificate signed by an Authorized Officer stating
that the release of the respective Collateral is permitted pursuant to Section
8.8(a) or (b) hereof.
8.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.
8.10 The Collateral Agent. The Collateral Agent will hold in
--------------------
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the
obligations of the Collateral Agent as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement. The Collateral
Agent shall act hereunder on the terms and conditions set forth in Section 13 of
the Credit Agreement.
8.11 Additional Assignors. It is understood and agreed that any
--------------------
Subsidiary of the Company or other Person that is required to execute a
counterpart of this Agreement after the date hereof pursuant to Section 9.14 of
the Credit Agreement shall automatically become an Assignor hereunder by
executing a counterpart hereof and delivering the same to the Collateral Agent.
* * *
Page 24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
Address: CHARTWELL CANADA HOSPITALITY CORP.,
000 Xxxxx Xxxxxx as an Assignor
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By:_____________________________
Name:
Attention: Xxxxxxx Xxxxx Title:
000 Xxxxx Xxxxxx XXXXXXXXX XXXXXX CORP.,
Xxx Xxxx, Xxx Xxxx 00000 as an Assignor
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
By:_____________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
000 Xxxxx Xxxxxx CHARTWELL LEISURE INC.,
Xxx Xxxx, Xxx Xxxx 00000 as an Assignor
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
By:_____________________________
Attention: Xxxxxxx Xxxxx Name:
Title:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:_____________________________
Name:
Title:
ANNEX A
to
SECURITY
AGREEMENT
---------
SCHEDULE OF CHIEF EXECUTIVE OFFICES
-----------------------------------
AND OTHER RECORD LOCATIONS
--------------------------
Chartwell Leisure Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Chartwell Canada Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Chartwell Canada Hospitality Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ANNEX B
to
SECURITY
AGREEMENT
---------
TRADE AND FICTITIOUS NAMES
--------------------------
None
